The below figure shows the demand and supply curves in the market for gasoline. The price and quantity at the point of intersection of the demand and supply curves is $30 and 300 gallons respectively.Figure 3.6

-Assume that the market for gasoline in Figure 3.6 is in equilibrium. What is the most likely consequence of a government-imposed price ceiling at $10 per unit?
A)The profit made by gasoline producers will increase.
B)The demand for gasoline will decrease.
C)The quantity of gasoline supplied to the market will decrease.
D)There will be a surplus of gasoline in the market.
E)The demand curve for gasoline will shift to the right.

Question

The below figure shows the demand and supply curves in the market for gasoline. The price and quantity at the point of intersection of the demand and supply curves is $30 and 300 gallons respectively.Figure 3.6
 
-Assume that the market for gasoline in Figure 3.6 is in equilibrium. What is the most likely consequence of a government-imposed price ceiling at $10 per unit?
A)The profit made by gasoline producers will increase. 
B)The demand for gasoline will decrease. 
C)The quantity of gasoline supplied to the market will decrease. 
D)There will be a surplus of gasoline in the market. 
E)The demand curve for gasoline will shift to the right.

Quizplus · Accepted Answer

A price ceiling set below the equilibrium price typically results in a decrease in the quantity supplied, as producers are less willing to supply the same amount at a lower price. This leads to a shortage, not a surplus, and does not directly affect the demand curve's position.

The Below Figure Shows the Demand and Supply Curves in the Market