FIGURE 5-2
-Refer to Figure 5-2.A price ceiling set at a price of $1.00 per unit will result in
A)a shortage of 10 units.
B)a shortage of 20 units.
C)a surplus of 10 units.
D)a surplus of 20 units.
E)no change to the market outcomes.

Question

FIGURE 5-2
-Refer to Figure 5-2.A price ceiling set at a price of $1.00 per unit will result in
A)a shortage of 10 units. 
B)a shortage of 20 units. 
C)a surplus of 10 units. 
D)a surplus of 20 units. 
E)no change to the market outcomes.

Quizplus · Accepted Answer

At a price ceiling of $1.00, the quantity demanded would increase to 40 units while the quantity supplied would decrease to 20 units. This results in a shortage of 20 units (40-20=20).

FIGURE 5-2 -Refer to Figure 5-2.A Price Ceiling Set at a Price