Figure 6-12

-Refer to Figure 6-12.When the price ceiling applies in this market,and the supply curve for gasoline shifts from S₁ to S₂,

Question

Figure 6-12
 
-Refer to Figure 6-12.When the price ceiling applies in this market,and the supply curve for gasoline shifts from S₁ to S₂,

Quizplus · Accepted Answer

When the supply curve shifts from S1 to S2, the equilibrium price would increase from P1 to P2. However, since there is a price ceiling, the price cannot exceed P1. This creates a situation where the quantity demanded exceeds the quantity supplied, resulting in a shortage. Therefore, the correct choice is D.

Figure 6-12 -Refer to Figure 6-12.When the Price Ceiling Applies in This