what is the economic effect of price ceilings?\na. an effective price ceiling will lead to a surplus.\nb. an…

what is the economic effect of price ceilings?\na. an effective price ceiling will lead to a surplus.\nb. an effective price ceiling will lead to a shortage.\nc. resources will be allocated efficiently.\nd. there are no economic effects.

what is the economic effect of price ceilings?\na. an effective price ceiling will lead to a surplus.\nb. an effective price ceiling will lead to a shortage.\nc. resources will be allocated efficiently.\nd. there are no economic effects.

Answer

Brief Explanations:

A price - ceiling is a legal maximum price. When it is set below the equilibrium price, quantity demanded exceeds quantity supplied, leading to a shortage. It also causes inefficiencies such as deadweight loss and non - price rationing.

Answer:

B. An effective price ceiling will lead to a shortage.