Question

When a price ceiling is imposed in a market,

A a persistent shortage result Correct Answer Incorrect Answer
B a persistent surplus result Correct Answer Incorrect Answer
C sellers of the product are made better off Correct Answer Incorrect Answer
D no one is made better off Correct Answer Incorrect Answer

Solution

If a price suddenly begins to rise too rapidly, the government can stop the increase by setting a price ceiling in the market. The price ceiling is a maximum price. Of course, the ceiling creates problems of its own — chronic excess demand.

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