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

Group of answer choices:

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.

Question

Jones

Business

3 January, 21:52

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

Group of answer choices:

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.

+2

Answers (1)

Know the Answer?

Ernest Moody · Answer 1

Option C is the correct answer choice

Explanation:

Suppose the government imposes a price ceiling above the equilibrium price of a given good, then there will obviously be no change in the market; reason being that a price ceiling that is above the equilibrium price is a non binding price ceiling and it does not affect the market.

Therefore, there will be no observed change in supply or demand.

So, Option C is the correct answer choice