Multiple Choice
Which of these statements about price ceilings is correct?
A) Whether a price ceiling is placed below or above the equilibrium price, it will always cause deadweight loss.
B) A price ceiling will only cause deadweight loss if it is placed above the equilibrium price.
C) A price ceiling will only cause deadweight loss if it is placed below the equilibrium price.
D) Whether a price ceiling is placed below or above the equilibrium price, it will always cause a shortage of the good.
Correct Answer:
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