When the government imposes a price ceiling on a good whose price is too high,
A) surpluses are created.
B) supply will increase to meet the demand.
C) rationing is not necessary.
D) quantity demanded of the good will fall.
E) chronic excess demand occurs.

Question

Quizplus · Accepted Answer

A price ceiling set below the equilibrium price leads to a shortage, as the quantity demanded exceeds the quantity supplied, resulting in chronic excess demand.

When the Government Imposes a Price Ceiling on a Good