Question

Which of the following is true about the price buyers are willing to pay on the margin for another unit of a good in a market with a price ceiling?

A. Buyers are not willing to pay as much as they are required to pay.
B. Buyers are not willing to pay as much as sellers are willing to accept.
C. Buyers are willing to pay more than they are allowed to pay.
D. Buyers are willing to pay more in time than they are in money.

Answer 1

Buyers are not willing to pay as much as sellers are willing to accept when a price ceiling is imposed in a market.

Step-by-step explanation:

When a price ceiling is imposed in a market, it means that the maximum price that sellers can charge for a good is set below the equilibrium price. This leads to a situation where buyers are not willing to pay as much as sellers are willing to accept for the good. In other words, the price buyers are willing to pay on the margin for another unit of the good is lower than the price sellers are willing to accept.