Reference: Ref 8-2 (Figure: Price Controls) Refer to the figure. Which of the following price controls would cause a shortage of 20 units of the good?
A) a price ceiling of $10
B) a price floor of $10
C) a price ceiling of $6
D) a price floor of $6

Question

Reference: Ref 8-2 (Figure: Price Controls) Refer to the figure. Which of the following price controls would cause a shortage of 20 units of the good?
A) a price ceiling of $10 
B) a price floor of $10 
C) a price ceiling of $6 
D) a price floor of $6

Quizplus · Accepted Answer

A price ceiling of $6 would cause a shortage of 20 units of the good because the quantity demanded at that price ($6) exceeds the quantity supplied. This would result in a situation where there are more buyers than sellers, and some buyers would not be able to purchase the good they want.

Reference: Ref 8-2 (Figure: Price Controls) Refer to the Figure