The imposition of a price ceiling on a market often results in:
A)an increase in investment in the industry.
B)a surplus.
C)a shortage.
D)a decrease in discrimination on the part of sellers.
E)none of the above.

Question

Quizplus · Accepted Answer

When a price ceiling is imposed below the market equilibrium price, it creates excess demand or a shortage, as consumers demand more than what suppliers are willing to supply at the lower price. As a result, some sellers may leave the market, reducing the overall market supply, and consumers may resort to non-price rationing methods such as queuing or discrimination based on non-price factors such as race or gender. The other options are not typically associated with price ceilings.

The Imposition of a Price Ceiling on a Market Often