(Figure: Government Price Controls) Refer to the figure. Thegovernment enacts a price control causing a shortage of 15units of the good. Therefore, the ________ is set at ________.

Question

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The figure shows that the equilibrium price is at $17 and the government has enacted a price control that has caused a shortage of 15 units. This means that the government has set a price ceiling, which is a maximum price that can be charged, and has set it below the equilibrium price. Therefore, the answer is C, price ceiling at $10.

(Figure: Government Price Controls) Refer to the Figure