Asked by Jessica Sheppard on May 27, 2024
Verified
Refer to Figure 6-18. If the government set a price ceiling at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?
Price Ceiling
A government-imposed limit on how high a price can be charged for a product or service, typically set below the market equilibrium price.
Shortage/Surplus
A market condition where the quantity of a good supplied is not equal to the quantity demanded, with a shortage being a deficit and a surplus being an excess.
- Assess graphical displays illustrating market situations with government-enacted price controls.
- Identify the instances leading to market shortages or surpluses as a consequence of price controls.
Verified Answer
EC
Edward Captain-LarryMay 28, 2024
Final Answer :
A price ceiling set at $15 would not be binding, so there would be neither a shortage nor a surplus.
Learning Objectives
- Assess graphical displays illustrating market situations with government-enacted price controls.
- Identify the instances leading to market shortages or surpluses as a consequence of price controls.