The shortage created by a price ceiling will likely be
A) smaller if the good is a necessity.
B) larger if the good is addictive.
C) smaller if the good is a luxury.
D) unaffected by the time that has elapsed since the price ceiling is implemented.
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

If the good is a necessity, consumers are willing to pay a higher price for it, and therefore, the shortage created by a price ceiling will likely be smaller.

The Shortage Created by a Price Ceiling Will Likely Be