When a shortage of a good is present due to a price ceiling,
A) the amount supplied will be greater than the amount demanded.
B) the quality of the good will generally improve.
C) non-price factors, such as discrimination or waiting in line, will play a greater role in the allocation of the good.
D) the demand for the product will increase and, thereby, eliminate the shortage.

Question

Quizplus · Accepted Answer

A price ceiling set below the equilibrium price causes a shortage, leading to non-price rationing mechanisms like discrimination or waiting in line to allocate the limited supply.

When a Shortage of a Good Is Present Due to a Price