When the Government Establishes a Price Ceiling Below the Equilibrium

question 97

Multiple Choice

When the government establishes a price ceiling below the equilibrium price:

• A)there will be a temporary shortage that market forces will eventually clear.
• B)a shortage will occur that market forces will not be able to clear.
• C)producers will eliminate the resulting shortage by jointly deciding to increase supply.
• D)the market equilibrium price will prevail.

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