If a price ceiling is imposed and the quantity demanded exceeds the quantity supplied,which of the following is not likely to occur?

Question

Quizplus · Accepted Answer

If the quantity demanded exceeds the quantity supplied due to a price ceiling, increased production is not likely to occur. This is because producers may not be able to afford the cost of production and may therefore reduce their output or exit the market altogether. The other options are likely outcomes when a price ceiling is imposed and there is excess demand. Nonprice rationing may be necessary to allocate the limited supply among consumers, black markets may emerge where sellers charge higher prices, and quality deterioration may occur if producers cut corners to reduce costs.

If a Price Ceiling Is Imposed and the Quantity Demanded