(Table: Market for Butter) Use Table: Market for Butter. If the government imposes a price ceiling of $0.90 per pound of butter, the quantity of butter actually purchased will be _____ million pounds.
A) 10.5
B) 9.0
C) 1.5
D) 10.0

Question

(Table: Market for Butter) Use Table: Market for Butter. If the government imposes a price ceiling of $0.90 per pound of butter, the quantity of butter actually purchased will be _____ million pounds. 
A) 10.5 
B) 9.0 
C) 1.5 
D) 10.0

Quizplus · Accepted Answer

A price ceiling is a legal maximum price that can be charged for a good or service. In this case, the price ceiling is $0.90 per pound of butter. Looking at the table, we can see that at a price of $0.90, only 9 million pounds of butter will be supplied by producers, but consumers demand 10.5 million pounds. This means there will be a shortage of 1.5 million pounds (10.5 - 9 = 1.5). Therefore, the quantity of butter actually purchased will be the same as the quantity supplied, which is 9 million pounds. Hence, the answer is B.