Exhibit 4-9 Refer to Exhibit 4-9. Suppose that the government imposes a price ceiling at a price of $10. The number of units that would be exchanged in this market would be
A)150, since that is the equilibrium quantity and the price ceiling is below the equilibrium price.
B)220, since that is the number of units demanded at the price ceiling (and the quantity demanded is greater than the quantity supplied).
C)90, since that is the number of units supplied at the price ceiling (and the quantity supplied is less than the quantity demanded).
D)155, since that is the average of the quantity demanded and the quantity supplied at the price ceiling.

Question

Exhibit 4-9  Refer to Exhibit 4-9.  Suppose that the government imposes a price ceiling at a price of $10.  The number of units that would be exchanged in this market would be
A)150, since that is the equilibrium quantity and the price ceiling is below the equilibrium price. 
B)220, since that is the number of units demanded at the price ceiling (and the quantity demanded is greater than the quantity supplied). 
C)90, since that is the number of units supplied at the price ceiling (and the quantity supplied is less than the quantity demanded). 
D)155, since that is the average of the quantity demanded and the quantity supplied at the price ceiling.

Quizplus · Accepted Answer

At the price ceiling of $10, the quantity supplied is 90, which is less than the quantity demanded of 220. Therefore, only 90 units would be exchanged in the market. This is because the price ceiling prevents the price from rising to its equilibrium level, causing a shortage in the market.