When a government increases an effective price ceiling for a product
A) the shortage in the market will be reduced.
B) the shortage in the market will be increased.
C) the surplus in the market will be reduced.
D) the surplus in the market will increase.

Question

Quizplus · Accepted Answer

When a government increases an effective price ceiling for a product, it allows the price to move closer to the equilibrium price, thereby reducing the shortage in the market.

When a Government Increases an Effective Price Ceiling for a Product