If the equilibrium price of good X is $5 and a price ceiling is imposed at $4, the result will be a(n):
A) accumulation of inventories of unsold gas.
B) shortage.
C) surplus.
D) all of the above.

Question

Quizplus · Accepted Answer

When a price ceiling is imposed below the equilibrium price, it creates a situation where the quantity demanded exceeds the quantity supplied, leading to a shortage. This means that there will be excess demand for the product, and some buyers will not be able to purchase the good at the lower price. In this case, imposing a price ceiling of $4 on a product with an equilibrium price of $5 will likely lead to a shortage of the good.

If the Equilibrium Price of Good X Is $5 and a Price