The government decides to impose a price ceiling on a good because it thinks the market-determined price is too high.If it imposes the price ceiling above the equilibrium price:
A)consumers will respond to the higher price and therefore wish to purchase less of the good than at the equilibrium price.
B)producers will respond to the higher price and therefore offer fewer units for sale.
C)consumers will purchase less of the good after the price ceiling is imposed.
D)neither producers nor consumers will change their behavior.

Question

Quizplus · Accepted Answer

A price ceiling set above the equilibrium price does not affect the market because the market price is already lower than the ceiling. Therefore, neither producers nor consumers will change their behavior.

The Government Decides to Impose a Price Ceiling on a Good