A price ceiling imposed on a monopoly may:
A) lead to a shortage.
B) lead to no shortage.
C) drive the monopolist out of business.
D) All of the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

A price ceiling can lead to a shortage if the ceiling is below the equilibrium price, causing demand to exceed supply. It might not lead to a shortage if set above the equilibrium price or at it. Additionally, if the price ceiling is significantly low, it could potentially drive the monopolist out of business by making it unprofitable to operate.

A Price Ceiling Imposed on a Monopoly May