Suppose a Price Ceiling Is Currently Set Below the Equilibrium

question 372

Multiple Choice

Suppose a price ceiling is currently set below the equilibrium price. Now suppose that policy makers decide to lower the price ceiling. This reduction in the price ceiling will cause which of the following to occur?

• A) The shortage in the market will decrease.
• B) The shortage in the market will increase.
• C) The surplus in the market will decrease.
• D) The surplus in the market will increase.

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