(Table: Market for Milk) Use Table: Market for Milk. If the government imposes a price ceiling of $0.90 per pound of milk, the quantity of milk actually purchased will be _____ million pounds.
A)10.5
B)9.0
C)1.5
D)10.0

Question

(Table: Market for Milk) Use Table: Market for Milk. If the government imposes a price ceiling of $0.90 per pound of milk, the quantity of milk actually purchased will be _____ million pounds. 
A)10.5 
B)9.0 
C)1.5 
D)10.0

Quizplus · Accepted Answer

A price ceiling of $0.90 is below the equilibrium price of $1.00, so there will be excess demand. The quantity demanded at this price will be 9 million pounds, which is below the quantity supplied of 10.5 million pounds. Therefore, the quantity of milk actually purchased will be 9 million pounds.