A price ceiling set below the free-market equilibrium price will result in
A)a clearing of the market.
B)greater quantity exchanged.
C)surpluses.
D)excess demand.
E)excess supply.

Question

Quizplus · Accepted Answer

When a price ceiling is set below the equilibrium price, it creates excess demand as quantity demanded exceeds quantity supplied at the artificially low price. This can result in shortages or waiting lists for the product or service. Therefore, option D, excess demand, is the correct answer.

A Price Ceiling Set Below the Free-Market Equilibrium Price Will