-Refer to the above figure. A price ceiling has been set at P1, and a black market has opened. The equilibrium black market quantity will be
A) below Q1.
B) above Q3.
C) between Q1 and Q3.
D) Q2.

Question

-Refer to the above figure. A price ceiling has been set at P1, and a black market has opened. The equilibrium black market quantity will be
A) below Q1. 
B) above Q3. 
C) between Q1 and Q3. 
D) Q2.

Quizplus · Accepted Answer

The equilibrium black market quantity will be between Q1 and Q3 because the price ceiling set at P1 creates a shortage by reducing the quantity supplied to Q1, while the demand remains at Q3. The black market aims to meet this excess demand, thus operating within this range.

-Refer to the Above Figure