If the equilibrium price for some product is $1000, a price ceiling of $800 will result in
A) massive surpluses of the good.
B) the same general effects as a price ceiling of $600.
C) no effects because the price ceiling is not binding at that price.
D) the same general effects as a price ceiling of $1200.
E) the same general effects as a price floor of $1200.

Question

Quizplus · Accepted Answer

A price ceiling below the equilibrium price, such as $800, will lead to shortages, similar to a price ceiling of $600, as both are below the equilibrium price and thus binding.

If the Equilibrium Price for Some Product Is $1000, a Price