If a binding price ceiling is imposed below the market equilibrium price, the immediate standard result is:

If a binding price ceiling is imposed below the market equilibrium price, the immediate standard result is:

Options:

1. A surplus as suppliers produce more than buyers want
2. A shortage where quantity demanded exceeds quantity supplied
3. No change if the ceiling is not enforced
4. Prices rise above the ceiling due to scarcity

Correct answer: A shortage where quantity demanded exceeds quantity supplied

Explanation: A binding price ceiling below equilibrium causes quantity demanded (Qd) to exceed quantity supplied (Qs), creating a shortage; this follows directly from the supply-and-demand mechanism where price is kept below the clearing level.

Created 2026-03-10T18:48:36.539Z. Updated 2026-03-10T18:48:36.539Z.