Suppose a $3 per gallon price ceiling is imposed on gasoline, and the equilibrium price of gasoline is $2 per gallon. Such a price ceiling would lead to long lines at gas stations.

Question

Quizplus · Accepted Answer

A price ceiling of $3 per gallon would not create long lines at gas stations if the equilibrium price is already lower at $2 per gallon. This is because consumers can still purchase gasoline at the lower price without facing shortages or rationing.

Suppose a $3 Per Gallon Price Ceiling Is Imposed on Gasoline