A government-imposed price ceiling set below the market's equilibrium price for a good will produce an excess supply of the good.

Name: A government-imposed price ceiling set below the market's equilibrium price for a good will produce an excess supply of the good.
Brand: Quizplus
Rating: 4.7 (41 reviews)

Question

Quizplus · Accepted Answer

A price ceiling set below the market equilibrium price will lead to excess demand, or a shortage, because the lower price increases quantity demanded while decreasing quantity supplied.

A Government-Imposed Price Ceiling Set Below the Market's Equilibrium Price