If the equilibrium price of natural gas is $4 per thousand cubic feet and a price ceiling is imposed at $3 per thousand cubic feet, the result will be:
A) a surplus of natural gas.
B) a shortage of natural gas.
C) an accumulation of inventories of unsold gas.
D) None of these.

Question

Quizplus · Accepted Answer

When a price ceiling is imposed below the equilibrium price, it creates a situation where the quantity demanded exceeds the quantity supplied, resulting in a shortage. Therefore, a price ceiling of $3 per thousand cubic feet would result in a shortage of natural gas.

If the Equilibrium Price of Natural Gas Is $4 Per