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Agriculture Economics QUESTION #11896
Question 1
A binding price ceiling set below the equilibrium price results in:
  • A persistent surplus
  • A persistent shortage, since $Q_d > Q_s$✔️
  • No change in the market outcome
  • An increase in quantity supplied
Correct Answer Explanation
A price ceiling below equilibrium causes quantity demanded to exceed quantity supplied ($Q_d > Q_s$), creating a shortage.