Assume No Price Ceiling Exists and a Market Is in Equilibrium

question 174

Multiple Choice

Assume no price ceiling exists and a market is in equilibrium. Then a price ceiling is established which is below the market equilibrium. What would result?

• A) Shortage.
• B) Equilibrium.
• C) Surplus.
• D) Equity.

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Definitions:

Bilateral Contract

A promise exchanged for a promise.

Scott V. Mid-Carolina Homes

A legal case that likely involves dispute resolution between an individual and a housing company, although specific details may vary.

Mutual Mistake

Mutual mistake is a situation in which all parties to a contract have a shared misunderstanding about a fundamental fact or assumption underlying that contract.

Unilateral Mistake

A legal term referring to a situation where only one party to a contract is mistaken about a material fact relating to the agreement.