Refer to the market graph shown above. A black market where the price is $2.00 could result from a price

Question

Quizplus · Accepted Answer

If a price ceiling is set at $2.50 or lower, then the market price can still fluctuate below $2.00 without resulting in a black market. If a price floor is set at $1.50 or higher, then the market price can still fluctuate above $2.00 without resulting in a black market. Therefore, the only option that could result in a black market where the price is $2.00 is a price ceiling set at $1.50 or lower, which would cause a shortage and lead to a black market where the equilibrium price of $2.00 is exceeded.

Refer to the Market Graph Shown Above