Asked by Taylor Marler on May 18, 2024
Verified
For a particular product, an effective price ceiling results in
A) quantity demanded greater than quantity supplied.
B) quantity supplied greater than quantity demanded.
C) quantity demanded equal to quantity supplied.
D) demand equal to supply.
Price Ceiling
A government-imposed limit on how high a price can be charged for a product or service, aimed at preventing prices from reaching levels deemed too high for consumers.
Quantity Demanded
The total amount of a good or service that consumers are willing and able to purchase at a given price level, at a specific time.
- Gain an understanding of the fundamentals of price ceilings and floors, as well as their influence on the balance of market forces.
Verified Answer
LS
Leena SamanyaMay 19, 2024
Final Answer :
A
Explanation :
An effective price ceiling, set below the equilibrium price, results in a quantity demanded that is greater than the quantity supplied, leading to a shortage.
Learning Objectives
- Gain an understanding of the fundamentals of price ceilings and floors, as well as their influence on the balance of market forces.