Question

All of the following will occur if the government places an effective price ceiling on candy bars except:

a. vendors may discriminate in determining who gets to buy the candy bars.
b. the quantity supplied of candy bars will be less than the quantity demanded of candy bars.
c. there will be a surplus of candy bars.
d. a black market in candy bars will flourish.
e. there will be a shortage of candy bars.

Answer 1

c. there will be a surplus of candy bars.

Step-by-step explanation:

A price ceiling is when the government or an agency of the government sets the maximum price for a good or service.

If a price ceiling is effective, the price ceiling is set below equilibrium price.

If price is set below equilibrium price, the quantity supplied would fall and this would lead to an excess of demand over supply. Also, scarcity of the product for which a price ceiling has been set would occur.

A black market would occur. There would be a drop in the quality of product as sellers would be trying to maximise profits.

I hope my answer helps you