A price ceiling that is set below the equilibrium price will cause:
A)producer surplus to fall.
B)total economic surplus to rise.
C)quantity supplied to exceed quantity demanded.
D)an increase in demand.

Question

Quizplus · Accepted Answer

A price ceiling that is set below the equilibrium price will lower producer surplus both because producers will be willing to sell fewer units and because they will receive a lower price for each unit that they do sell.

A Price Ceiling That Is Set Below the Equilibrium Price