The more elastic the supply and the demand curves are, the:
A) smaller the shortage a price ceiling will create.
B) greater the shortage a price ceiling will create.
C) smaller the surplus a price ceiling will create.
D) greater the surplus a price ceiling will create.

Question

Quizplus · Accepted Answer

When supply and demand are more elastic, they are more responsive to price changes, leading to a larger shortage when a price ceiling is imposed below the equilibrium price.

The More Elastic the Supply and the Demand Curves Are