Price ceilings frequently lead to
A)an accumulation of surpluses.
B)an increase in the number of units purchased, moving along the demand curve.
C)increased production, since producers respond to increased consumer demand at the low ceiling price.
D)result in the development of black markets.

Question

Quizplus · Accepted Answer

Price ceilings set below the equilibrium price can create shortages, which may lead to a black market where sellers charge a higher price than the legal maximum. This occurs because demand is greater than supply at the price ceiling, creating an excess demand or a shortage.

Price Ceilings Frequently Lead to