If a Price Ceiling Is Set at $8 in the Market

question 94

Multiple Choice

If a price ceiling is set at $8 in the market shown in the graph:

• A) a shortage of 7 units will occur.
• B) a shortage of 15 units will occur.
• C) a shortage of 23 units will occur.
• D) a shortage of 8 units will occur.

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers at various prices.

Decrease In Demand

A downward shift in the demand curve for a product, indicating that consumers now desire less of the product at each price level.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level, at a given point in time, often depicted as a point on a demand curve.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or resource, usually to protect consumers.