A price ceiling is set ________the equilibrium quantity and results in a ________.

Question

Quizplus · Accepted Answer

A price ceiling is a government-imposed limit on the price charged for a product or service, which is usually set below the market equilibrium. When a price ceiling is set below the equilibrium price, it creates a shortage, as the quantity demanded exceeds the quantity supplied at the lower price. Therefore, the correct answer is B, below; shortage.

A Price Ceiling Is Set ________The Equilibrium Quantity and Results