Reference: Ref 8-4 (Figure: Effects of Price Ceilings) Refer to the figure. At a price ceiling of $2:
A) bribes of $1 per unit may be common.
B) seller discounts of $1 may be common.
C) bribes of $3 per unit may be common.
D) seller discounts of $3 per unit may be common.

Question

Reference: Ref 8-4 (Figure: Effects of Price Ceilings) Refer to the figure. At a price ceiling of $2:
A) bribes of $1 per unit may be common. 
B) seller discounts of $1 may be common. 
C) bribes of $3 per unit may be common. 
D) seller discounts of $3 per unit may be common.

Quizplus · Accepted Answer

At a price ceiling of $2, the equilibrium quantity demanded is greater than the equilibrium quantity supplied. This leads to a shortage in the market, and in order to obtain the product, buyers may offer bribes to sellers to sell the product at the price ceiling. In this case, bribes of $1 per unit may be common. Therefore, choice A is the correct answer.

Reference: Ref 8-4 (Figure: Effects of Price Ceilings) Refer to the Figure