A consequence of either a price ceiling or a price floor is
A) a market surplus.
B) an unwanted market allocation.
C) a market shortage.
D) better organization of resource allocation,resulting in more efficiency.
E) Price floors and price ceilings cannot have an identical outcome.

Question

Quizplus · Accepted Answer

Price ceilings (set below the equilibrium price) can lead to shortages, and price floors (set above the equilibrium price) can lead to surpluses. Both interfere with the market's ability to allocate resources efficiently, leading to unwanted market allocations, such as inefficiencies and distortions in supply and demand.

A Consequence of Either a Price Ceiling or a Price