Suppose a Price Ceiling Is Set Above the Equilibrium Price

question 229

Multiple Choice

Suppose a price ceiling is set above the equilibrium price. Now suppose that policy makers decide to raise the price ceiling. This increase in the price ceiling will cause which of the following to occur?

• A) The surplus in the market will increase.
• B) The surplus in the market will decrease.
• C) The shortage in the market will increase.
• D) None of the above.

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Definitions:

Opacity

The condition of being opaque, which can refer to a substance or tissue that does not allow light to pass through.

Retinal Detachment

A serious condition where the retina at the back of the eye pulls away from its normal position, potentially leading to vision loss.

Pupillary Constriction

The process in which the pupils decrease in size, often in response to bright light, to regulate the amount of light entering the eye.