Question 10If a price ceiling is imposed below the equilibrium price:1 pointsupply will increase above what it would be otherwise.demand will decrease below what it would be otherwise.the quantity supplied will be higher than it would be otherwise.the quantity demanded will be higher than it would be otherwise.
Question
Question 10If a price ceiling is imposed below the equilibrium price:1 pointsupply will increase above what it would be otherwise.demand will decrease below what it would be otherwise.the quantity supplied will be higher than it would be otherwise.the quantity demanded will be higher than it would be otherwise.
Solution
The correct answer is: the quantity demanded will be higher than it would be otherwise.
Here's why:
A price ceiling is a government-imposed limit on how high a price can be charged for a product. If this ceiling is set below the equilibrium price (the price at which supply equals demand), it results in a shortage.
This is because at the lower price, consumers will demand more of the product, but suppliers will be less willing to supply it. So, the quantity demanded will be higher than it would be otherwise.
On the other hand, the quantity supplied will be lower than it would be otherwise, because suppliers are not willing to supply as much of the product at the lower price.
So, the statement "the quantity demanded will be higher than it would be otherwise" is correct.
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