A price ceiling exists when the price is set
A) above the equilibrium value.
B) at the equilibrium value.
C) too high.
D) too low.
E) below the equilibrium value.

Question

Quizplus · Accepted Answer

A price ceiling is a maximum price that can be charged for a good or service, which is set below the equilibrium value. This creates a shortage of the product, as quantity demanded exceeds quantity supplied at the price ceiling.

A Price Ceiling Exists When the Price Is Set