If a binding price ceiling is in place and if the demand curve for the product shifts rightward, one consequence would be
A) the quantity exchanged would increase.
B) a decrease in the amount of excess demand.
C) the quantity exchanged would remain constant.
D) the quantity exchanged would decrease.
E) an increase in the amount of excess supply.

Question

Quizplus · Accepted Answer

With a binding price ceiling, the price is set below the equilibrium, causing a shortage. If demand increases, the shortage worsens, but the quantity exchanged remains constant at the ceiling level.

If a Binding Price Ceiling Is in Place and If