If the equilibrium price of widgets is $22, and then a price ceiling of $24 is imposed by the government, as a result,
A)there will be no effect on the widget market.
B)there will be a shortage of widgets.
C)there will be a surplus of widgets.
D)the price of widgets will increase.

Question

If the equilibrium price of widgets is $22, and then a price ceiling of $24 is imposed by the government, as a result,
A)​there will be no effect on the widget market.
B)​there will be a shortage of widgets.
C)​there will be a surplus of widgets.
D)​the price of widgets will increase.

Quizplus · Accepted Answer

Since the price ceiling of $24 is above the equilibrium price of $22, it does not restrict the market from reaching its equilibrium. Therefore, the market can operate as if the price ceiling were not there, resulting in no effect on the widget market.

If the Equilibrium Price of Widgets Is $22, and Then