Question

Due to the rising cost of textbooks, the government imposes a binding price ceiling on textbooks. As a result, any of the following could result except:

A) a first-come, first-served allocation.

B) a black market in textbooks.

C) allocation by seller's preference.

D) an increase in producer surplus.

Answer 1

A price ceiling can result in a shortage because quantity demanded exceeds quantity supplied, but it's unlikely to result in an increase in producer surplus.

Step-by-step explanation:

A price ceiling is a maximum price that can be legally charged by a seller for a good or service. When a price ceiling is imposed, it can lead to a shortage because the quantity demanded exceeds the quantity supplied. This means that some individuals may not be able to purchase the product, and sellers may suffer. However, one thing that is unlikely to happen as a result of a price ceiling is an increase in producer surplus.