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NEW QUESTION: 1
If the federal government were to regulate a product or service in a competitive market by setting a
maximum price that is below the equilibrium price, then in the long run this action will:
A. Have no effect on the market.
B. Result in a shortage.
C. Cause a decrease in price.
D. Result in a surplus.
Choice "b" is correct. Setting a maximum or ceiling price, which is below the equilibrium price dictated by
a competitive market, would result in a shortage as a result of excess demand. Choices "a", "c", and "d"
are incorrect, per the above Explanation: .