Figure 4-17
-Refer to Figure 4-17. Which of the following price controls would cause a shortage of 10 units of the good?
A) a price ceiling of $5.50
B) a price floor of $5.50
C) a price ceiling of $6.50
D) a price floor of $6.50

Question

Figure 4-17 
-Refer to Figure 4-17. Which of the following price controls would cause a shortage of 10 units of the good?
A) a price ceiling of $5.50 
B) a price floor of $5.50 
C) a price ceiling of $6.50 
D) a price floor of $6.50

Quizplus · Accepted Answer

A price ceiling of $5.50 would cause a shortage if the equilibrium price is above $5.50, as it would set a maximum price that is lower than the market equilibrium, leading to higher demand and lower supply, resulting in a shortage.

Figure 4-17 -Refer to Figure 4-17. Which of the Following Price Controls