When a price ceiling is in effect:
A) suppliers get too strong a signal from demanders about their needs.
B) demanders have no incentive to signal their needs to suppliers.
C) all of demanders' needs are met at the lower price, so there is no need to signal anything to suppliers.
D) demanders cannot signal their needs to suppliers.

Question

Quizplus · Accepted Answer

A price ceiling typically results in a shortage, meaning demand exceeds supply at the capped price. This makes it difficult for demanders to signal their needs effectively to suppliers, as the market cannot adjust through price changes.

When a Price Ceiling Is in Effect