A price ceiling below the equilibrium price is likely to result in a persistent _____,a transfer of surplus from _____,and _____ deadweight loss.
A)surplus;producers to some consumers;some
B)shortage;producers to some consumers;some
C)shortage;some consumers to producers;no
D)surplus;some consumers to producers;some

Question

Quizplus · Accepted Answer

A price ceiling below the equilibrium price will result in a shortage because the quantity supplied will be less than the quantity demanded. This will lead to a transfer of surplus from producers to some consumers who are able to purchase the product at the lower price. However, there will be some deadweight loss as the quantity exchanged will be less than the optimal level. Therefore, both A and D are incorrect. On the other hand, C is incorrect because there will be a shortage and not a surplus. Therefore, the correct answer is B.

A Price Ceiling Below the Equilibrium Price Is Likely to Result