The following figure illustrates the demand and supply curves for a good.

-Refer to the figure above.Which of the following is likely to happen if a price control above the equilibrium price is imposed?

Question

The following figure illustrates the demand and supply curves for a good.
 
-Refer to the figure above.Which of the following is likely to happen if a price control above the equilibrium price is imposed?

Quizplus · Accepted Answer

When a price control above the equilibrium price is imposed, this creates an artificial price floor. This will cause the quantity supplied to exceed the quantity demanded, resulting in a surplus of goods. Therefore, choice B is the correct answer. Choices A, C, and D are incorrect because they do not accurately reflect the impact of a price control above the equilibrium price.

The Following Figure Illustrates the Demand and Supply Curves for a Good