Suppose the government imposes a price ceiling on a good because it believes that the market-determined price is too high. A price ceiling above the equilibrium price will cause:
A)consumers purchase more of the good than at the equilibrium price.
B)producers offer fewer units of the good for sale.
C)consumers purchase less of the good.
D)neither producers nor consumers change their behavior.

Question

Quizplus · Accepted Answer

A price ceiling set above the equilibrium price does not affect the market because the market price is already lower than the ceiling. Therefore, neither producers nor consumers change their behavior, as the imposed limit does not constrain the market operations.

Suppose the Government Imposes a Price Ceiling on a Good