Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 6 - Part II - Supply, Demand, and Government Policies - Quick Check Multiple Choice - Page 129: 2

Answer

c. increase, decrease, shortage

Work Step by Step

A price ceiling is a legal maximum on the price at which a good must be sold. Since the price ceiling moves the price below the existing equilibrium price, the quantity demanded is greater than the quantity supplied of the good at the new market price, so there will be a shortage. Increasing the price ceiling moves the price closer towards the original equilibrium price, which reduces the shortage.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.

GradeSaver will pay $15 for your literature essays
GradeSaver will pay $25 for your college application essays
GradeSaver will pay $50 for your graduate school essays – Law, Business, or Medical
GradeSaver will pay $10 for your Community Note contributions
GradeSaver will pay $500 for your Textbook Answer contributions