If the government set a price ceiling of 25 cents for a loaf of bread, the most likely consequence would be

Question

Quizplus · Accepted Answer

Setting a price ceiling below the market equilibrium price makes the quantity demanded of a good exceed the quantity supplied, which creates a shortage. Thus, a price ceiling of 25 cents for a loaf of bread would cause a shortage of bread, as the cost of producing bread would exceed the revenue generated by sales at that price. This would result in limited supplies, delayed purchases, and long lines for bread, among other things.

If the Government Set a Price Ceiling of 25 Cents