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Figure: Price Ceiling
-(Figure: Price Ceiling) Refer to the figure. When a price ceiling of $10 is instituted by the government, consumers are able to buy how many units of the product?
A) 290 units
B) 310 units
C) 270 units
D) 40 units

Question

Use the following to answer questions:
Figure: Price Ceiling 
-(Figure: Price Ceiling) Refer to the figure. When a price ceiling of $10 is instituted by the government, consumers are able to buy how many units of the product?
A) 290 units 
B) 310 units 
C) 270 units 
D) 40 units

Quizplus · Accepted Answer

When a price ceiling of $10 is instituted, the quantity demanded increases from 300 to 370 units, while the quantity supplied decreases from 400 to 100 units. At the ceiling price of $10, the quantity demanded is 270 units (point B on the graph), which is the intersection of the demand curve and the price ceiling line. Therefore, consumers are able to buy 270 units of the product.

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