-Refer to Exhibit 4-1.At the equilibrium price,________ units of the good would be exchanged.With a price ceiling,_______ units of the good would be exchanged.
A) 125; 75
B) 75; 125
C) 175; 125
D) 125; 175

Question

-Refer to Exhibit 4-1.At the equilibrium price,________ units of the good would be exchanged.With a price ceiling,_______ units of the good would be exchanged.
A) 125; 75 
B) 75; 125 
C) 175; 125 
D) 125; 175

Quizplus · Accepted Answer

At the equilibrium price, the quantity supplied equals the quantity demanded, which is 125 units. With a price ceiling, the price is set below the equilibrium, leading to a higher quantity demanded than supplied, but only 75 units can be exchanged because that's the quantity suppliers are willing to provide at the lower price.