Use the following to answer questions:
Figure: Effects of Price Ceilings
-(Figure: Effects of Price Ceilings) Refer to the figure. At a price ceiling of $2:
A) bribes of $1 per unit may be common.
B) seller discounts of $1 may be common.
C) bribes of $3 per unit may be common.
D) seller discounts of $3 per unit may be common.

Question

Use the following to answer questions:
Figure: Effects of Price Ceilings 
-(Figure: Effects of Price Ceilings) Refer to the figure. At a price ceiling of $2:
A) bribes of $1 per unit may be common. 
B) seller discounts of $1 may be common. 
C) bribes of $3 per unit may be common. 
D) seller discounts of $3 per unit may be common.

Quizplus · Accepted Answer

At a price ceiling of $2, suppliers are not allowed to charge more than $2 per unit. However, at this price, the quantity demanded exceeds the quantity supplied, creating a shortage. In order to obtain the product, some buyers may offer bribes (i.e. pay extra money) to the supplier to ensure they receive the product. Therefore, choice A is the best answer.

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