-In the above figure, a shortage could be caused by a government price ceiling set at
A) $1.00.
B) $2.00.
C) $2.50.
D) $3.00.

Question

-In the above figure, a shortage could be caused by a government price ceiling set at
A) $1.00. 
B) $2.00. 
C) $2.50. 
D) $3.00.

Quizplus · Accepted Answer

A government price ceiling set below the equilibrium price can cause a shortage. If the equilibrium price is above $1.00, setting a price ceiling at $1.00 would result in a shortage as the quantity demanded would exceed the quantity supplied at that price.

-In the Above Figure, a Shortage Could Be Caused by a Government