Figure 6-12
-Refer to Figure 6-12. When the price ceiling applies in this market and the supply curve for gasoline shifts from S1 to S2,

Question

Figure 6-12 
-Refer to Figure 6-12. When the price ceiling applies in this market and the supply curve for gasoline shifts from S1 to S2,

Quizplus · Accepted Answer

When the supply curve shifts to S2, the new equilibrium price will be P2. However, this price is below the price ceiling at P1. This will cause a shortage of gasoline as consumers demand more gasoline than producers are willing to supply at the given price. Therefore, the correct answer is (D) a shortage will occur at the new market price of P2.

Figure 6-12 -Refer to Figure 6-12. When the Price Ceiling Applies in Ceiling