Price ceilings set below the equilibrium create:
A) externalities.
B) unemployment.
C) shortages.
D) surpluses.

Question

Quizplus · Accepted Answer

When price ceilings are set below the equilibrium, it creates a situation where the price cannot rise to balance the quantity demanded and quantity supplied. This often leads to excess demand or shortages, as consumers compete to buy a limited quantity of the good at the lower price.

Price Ceilings Set Below the Equilibrium Create