When a price ceiling is imposed below the equilibrium price of a commodity,
A) quantity supplied will be greater than quantity demanded for the good.
B) the problem of scarcity will be solved.
C) a shortage of the good will develop.
D) a surplus of the good will develop.

Question

Quizplus · Accepted Answer

When a price ceiling is set below the equilibrium price, it results in a lower price than what the market would naturally set, leading to higher demand and lower supply, thus creating a shortage.

When a Price Ceiling Is Imposed Below the Equilibrium Price