If the Government Imposes a Price Ceiling for Some Product,and

question 69

Multiple Choice

If the government imposes a price ceiling for some product,and a black market subsequently develops that gains control of all of the reduced output of the product,then

• A)the black market price will be lower than the ceiling price.
• B)excess profits will flow back to consumers.
• C)the quantity demanded will exceed quantity supplied at the black market price.
• D)the black market price will be higher than the free-market equilibrium price.
• E)consumers will be better off than they would be in the absence of the black market.