If the government implements a price ceiling on insulin,this will

Question

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A price ceiling is a legal maximum price that can be charged for a good. If the government imposes a price ceiling on insulin, it would reduce the price that consumers have to pay for insulin. However, it would also reduce the incentive for manufacturers to produce and supply insulin since they are not able to charge a price high enough to cover their costs. As a result, the quantity of insulin supplied would decrease. Therefore, the correct answer is B - a price ceiling would decrease the quantity of insulin manufacturers are willing to supply.

If the Government Implements a Price Ceiling on Insulin,this Will