Figure 6-9
-Refer to Figure 6-9.A price ceiling set at

Question

Figure 6-9 
-Refer to Figure 6-9.A price ceiling set at

Quizplus · Accepted Answer

A price ceiling is the maximum legal price that can be charged for a good or service. In this case, the equilibrium price is $6 and the price ceiling is set at $4. Since the price ceiling is below the equilibrium price, it is binding and will create a shortage of the product. The quantity demanded at $4 is 18, while the quantity supplied is only 10, resulting in a shortage of 8 units ($4-$6 = $-2, a -33.33% change).

Figure 6-9 -Refer to Figure 6-9.A Price Ceiling Set at