A Price Ceiling Set Below the Equilibrium Price Will Result

question 42

Multiple Choice

A price ceiling set below the equilibrium price will result in

• A)excess supply.
• B)excess demand.
• C)the equilibrium price.
• D)an increase in supply.
• E)a decrease in demand.

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Definitions:

Price Elasticity

Price elasticity refers to the responsiveness of the quantity demanded or supplied of a good or service to a change in its price.

Demand Schedule

A chart displaying the amounts of a product or service that buyers are ready and capable of purchasing at different price levels.

Relatively Inelastic

Describes a situation where the quantity demanded or supplied changes by a smaller percentage than the percentage change in price.

Demand Schedule

A demand schedule is a table that lists the quantity of a good that consumers are willing and able to purchase at various prices over a specific period.