Question

Suppose the government imposes a price ceiling above the equilibrium price of a given good. Which of the following is the most likely result?

a) Some other rationing device will emerge to allocate the good among buyers.
b) Some buyers and sellers will be willing to risk breaking the law in order to exchange the goods.
c) No change will occur in the market.
d) There may be buyers who are willing to pay quite high prices so they can consume more than what they are consuming now.
e) a, b, and d

Answer 1

c) No change will occur in the market.

Step-by-step explanation:

The correct option is : (c) No change will occur in the market

Reason: A price ceiling above the equilibrium price is a non binding price ceiling and it does not affect the market. No change in supply or demand occurs.