Suppose the Government Imposes a Price Ceiling Above the Equilibrium

question 12

Multiple Choice

Suppose the government imposes a price ceiling above the equilibrium price of a given good.Which of the following is the most likely result?

• A) Some other rationing device will emerge to allocate the good among buyers.
• B) Some buyers and sellers will be willing to risk breaking the law in order to exchange the good at a price above the equilibrium price since there would be a shortage of the good at the price ceiling.
• C) No change will occur in the market.
• D) Brute force will be used to allocate the good among buyers.
• E) a,b,and d

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