If a price ceiling is set below the equilibrium price,
A) quantity demanded will equal quantity supplied.
B) there will be a surplus.
C) there will be a shortage.
D) demand will be less than supply.

Question

Quizplus · Accepted Answer

When a price ceiling is set below the equilibrium price, it causes the price to be lower than what the market would naturally set, leading to a higher quantity demanded than quantity supplied. This discrepancy results in a shortage.

If a Price Ceiling Is Set Below the Equilibrium Price