Suppose two demand curves have a point in common, where demand and supply are in equilibrium. a. With a price ceiling consumer expenditure will change more with the flatter demand curve b. With a price ceiling consumer expenditures will change by the same amount for both the demand curves c. With a price ceiling consumer expenditure will change infinitely with the steeper demand curve d. With a price ceiling consumer expenditure will change more with the steeper demand curve

The correct answer is:

d. With a price ceiling consumer expenditure will change more with the steeper demand curve

A price ceiling is a maximum price that can be charged for a good or service. When a price ceiling is imposed, it is typically set below the equilibrium price. This leads to a shortage, as the quantity demanded exceeds the quantity supplied at the lower price.

The steepness of the demand curve indicates the price elasticity of demand. A steeper demand curve suggests that demand is inelastic, meaning consumers are less responsive to changes in price. Therefore, when a price ceiling is imposed, consumers with a steeper (more inelastic) demand curve will tend to increase their expenditure more, as they continue to demand the good despite the higher price.

In contrast, a flatter demand curve suggests that demand is elastic, meaning consumers are more responsive to changes in price. Therefore, when a price ceiling is imposed, consumers with a flatter (more elastic) demand curve will tend to increase their expenditure less, as they reduce their demand in response to the higher price.

Therefore, with a price ceiling, consumer expenditure will change more with the steeper demand curve.