-Refer to the above figure. A price ceiling of $20 results in
A) a shortage of 100 units.
B) a shortage of 200 units.
C) a surplus of 100 units.
D) a surplus of 200 units.

Question

-Refer to the above figure. A price ceiling of $20 results in
A) a shortage of 100 units. 
B) a shortage of 200 units. 
C) a surplus of 100 units. 
D) a surplus of 200 units.

Quizplus · Accepted Answer

A price ceiling set below the equilibrium price (which appears to be above $20 based on the context) would result in a shortage because the quantity demanded at $20 exceeds the quantity supplied at that price. The specific number (100 units) indicates the difference between quantity demanded and quantity supplied at the price ceiling of $20.

-Refer to the Above Figure