Figure: Price Ceiling (Figure: Price Ceiling) Refer to the figure. When a price ceilingof $10 is instituted by the government, consumers are able tobuy how many units of the product?

Question

Figure: Price Ceiling  (Figure: Price Ceiling) Refer to the figure. When a price ceilingof $10 is instituted by the government, consumers are able tobuy how many units of the product?

Quizplus · Accepted Answer

At a price of $10, the quantity demanded is 270 units, which is the point where the demand curve intersects with the price ceiling line. Any price above $10 is not allowed by the price ceiling, so the equilibrium quantity of 300 units is not possible. Neither are any of the other options, as they all represent quantities that correspond to prices above $10. Therefore, option C is the correct answer.

Figure: Price Ceiling (Figure: Price Ceiling) Refer to the Figure