Suppose the equilibrium price of bread is $2.00 per loaf. If the government sets a price ceiling of $2.50 per loaf:
A)the price of wheat will rise and a shortage is created.
B)the quantity supplied of wheat will increase.
C)there will be no change in the quantity of bread demanded or supplied.
D)there will be a shortage of bread.

Question

Suppose the equilibrium price of bread is $2.00 per loaf. If the government sets a price ceiling of $2.50 per loaf:
A)​the price of wheat will rise and a shortage is created.
B)​the quantity supplied of wheat will increase.
C)​there will be no change in the quantity of bread demanded or supplied.
D)​there will be a shortage of bread.

Quizplus · Accepted Answer

Since the price ceiling is set above the equilibrium price, it does not affect the market. The equilibrium price of $2.00 is still attainable, meaning there's no change in quantity demanded or supplied.

Suppose the Equilibrium Price of Bread Is $2