Suppose that the average cost of a visit to the dentist is $100.If the government imposes a price ceiling of $50 on the cost of a dental visit,there will be:
A) an excess supply of dental visits.
B) an excess demand for dental visits.
C) an increase in the equilibrium number of dental visits.
D) no change in the number of dental visits.

Question

Quizplus · Accepted Answer

With a price ceiling set at $50, the cost of visiting a dentist is lower than the average cost of $100. This will lead to an increase in demand for dental visits, creating excess demand. Dentists will not be able to charge the equilibrium price of $100 due to the price ceiling, which may result in a shortage of dental visits.

Suppose That the Average Cost of a Visit to the Dentist