If a Legal Price Ceiling Is Set Above the Equilibrium

question 149

Multiple Choice

If a legal price ceiling is set above the equilibrium price:

• A) a shortage of the product will occur.
• B) a surplus of the product will occur.
• C) a black market will evolve.
• D) neither the equilibrium price nor the equilibrium quantity will be affected.

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Definitions:

Communism

A political and economic ideology advocating for a classless society in which property and the means of production are communally owned.

Factor of Production

Economic resources used in the process of producing goods or services, typically categorized into land, labor, capital, and entrepreneurship.