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Table: Market for Apartments
-(Table: Market for Apartments) Look at the table Market for Apartments. If a price ceiling of $700 is imposed on this market, the result will be an inefficiency in the form of a _____ million apartments.
A) surplus of 0.6
B) shortage of 0.6
C) surplus of 0.2
D) shortage of 0.2

Question

Use the following to answer questions:
Table: Market for Apartments 
-(Table: Market for Apartments) Look at the table Market for Apartments. If a price ceiling of $700 is imposed on this market, the result will be an inefficiency in the form of a _____ million apartments.
A) surplus of 0.6 
B) shortage of 0.6 
C) surplus of 0.2 
D) shortage of 0.2

Quizplus · Accepted Answer

A price ceiling set below the equilibrium price results in a shortage because the quantity demanded exceeds the quantity supplied. If the equilibrium price is above $700, imposing a ceiling at $700 will lead to a shortage of 0.6 million apartments.

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