In a market economy, which of the following will most likely cause a prolonged milk shortage?
A) an increase in the demand for milk
B) an increase in the supply of milk
C) imposition of a price floor above the equilibrium price of milk
D) imposition of a price ceiling below the equilibrium price of milk

Question

Quizplus · Accepted Answer

A price ceiling below the equilibrium price will lead to a shortage because it sets a maximum price that is lower than what the market would naturally set, causing demand to exceed supply.

In a Market Economy, Which of the Following Will Most