Use the following to answer question:
-(Table: Market for Fried Twinkies) Look at the table The Market for Fried Twinkies. In response to popular anger over the high price of fried Twinkies and the extreme wealth of fried Twinkie producers, the government imposes a price ceiling of $1.20 per fried Twinkie. From this table, the price ceiling causes a _____ fried Twinkies.
A) shortage of 3,000
B) shortage of 5,000
C) surplus of 8,000
D) surplus of 3,000

Question

Use the following to answer question: 
-(Table: Market for Fried Twinkies) Look at the table The Market for Fried Twinkies. In response to popular anger over the high price of fried Twinkies and the extreme wealth of fried Twinkie producers, the government imposes a price ceiling of $1.20 per fried Twinkie. From this table, the price ceiling causes a _____ fried Twinkies.
A) shortage of 3,000 
B) shortage of 5,000 
C) surplus of 8,000 
D) surplus of 3,000

Quizplus · Accepted Answer

The price ceiling of $1.20 per fried Twinkie is below the equilibrium price of $1.50. At the price ceiling, the quantity supplied is 5,000 fried Twinkies, while the quantity demanded is 8,000 fried Twinkies. This creates a shortage of 3,000 fried Twinkies.

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