In a Competitive Market, a Price Ceiling Set Below the Free-

question 31

Multiple Choice

In a competitive market, a price ceiling set below the free- market equilibrium price will result in

• A) a new free- market equilibrium at a lower price and higher output level.
• B) the quantity demanded exceeding quantity supplied and thus a shortage in the market.
• C) the quantity supplied exceeding quantity demanded and thus a surplus in the market.
• D) excess supply.
• E) a continuation of the free- market equilibrium price and quantity.

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