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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