Price Ceilings and Floors Quick Check

The table gives the supply and demand schedules in a market for apartments. A government price control is implemented that results in a shortage of 300,000 apartments. Which price control must have been used?

a price ceiling of $1,000

Governments often implement price ceilings to protect consumers from the high prices of essential goods and services that frequently follow natural disasters. One unfortunate side effect of these price ceilings is that they will likely _____.

lead to a shortage as prices are kept from rising to their equilibrium level

A binding price ceiling is a mandated _____.

maximum price below the market equilibrium price

Governments often set price floors in an effort to protect _____.

producers from low market prices

Given the associated quantity demanded, Q1Q1, and quantity supplied, Q2Q2, which of the following describes the quantity Q2−Q1Q2−Q1?

the surplus resulting from the price floor Pc