If government imposes a price ceiling on a good that is below the market equilibrium price
A)a surplus will develop.
B)a shortage will develop.
C)producers will reduce their sales price.
D)consumers will reduce their demand for the good.

Question

Quizplus · Accepted Answer

When a price ceiling is imposed below the market equilibrium price, it creates a situation where the quantity demanded exceeds the quantity supplied. This creates a shortage in the market as consumers are willing to buy more of the good at the lower price, while producers are unwilling to supply the same quantity at the lower price.

If Government Imposes a Price Ceiling on a Good That