At a price ceiling of $1 per loaf of bread, quantity supplied is 99 loaves, which is less than quantity demanded. What must be true for the 100th loaf of bread?

Question

Quizplus · Accepted Answer

If quantity demanded is greater than quantity supplied, it implies that there are consumers who value the product (in this case, the 100th loaf of bread) more than the market price (here, $1.00). This suggests that the value to consumers of the 100th loaf of bread is more than what it costs producers to make it. Hence, choice D is correct. Choice A suggests that consumers do not want the 100th loaf of bread, but this contradicts the premise that quantity demanded exceeds quantity supplied. Choice B may or may not be true, but it is irrelevant to the question of what consumers value. Choice C is also not necessarily true, as consumers may still demand the 100th loaf of bread even if they do not value it at less than $1.00.

At a Price Ceiling of $1 Per Loaf of Bread