-The demand and supply schedules for pizza are in the table above.If the government sets a maximum legal price of $2 per slice of pizza,then
A) there is a shortage of 20 slices of pizza.
B) this maximum price is an example of a price floor.
C) this maximum price is an example of a price ceiling.
D) Both answers A and C are correct.
E) Both answers B and C are correct.

Question

-The demand and supply schedules for pizza are in the table above.If the government sets a maximum legal price of $2 per slice of pizza,then
A) there is a shortage of 20 slices of pizza. 
B) this maximum price is an example of a price floor. 
C) this maximum price is an example of a price ceiling. 
D) Both answers A and C are correct. 
E) Both answers B and C are correct.

Quizplus · Accepted Answer

A price ceiling is a maximum legal price set below the equilibrium price, causing a shortage when demand exceeds supply. At $2, demand is 120 slices while supply is 100 slices, creating a 20-slice shortage.

-The Demand and Supply Schedules for Pizza Are in the Table