MC Qu 58 Answer the next question based on Answer the next q

MC Qu. 58 Answer the next question based on... Answer the next question based on the followng supply and demand schedules in units per week for a product Price S 60 50 40 30 20 10 Quantity Demanded 100 140 180 220 260 300 Quantity Supplied 400 340 280 220 160 100 If demand increased by 100 units at each price level, and the government set a price celling of $40, then there will be Multiple Choice a shortage. a surplus no shortage or surplus

Solution

A shortage

At each price point, the demand is increasing but the quantity supplied is not as much as the suppliers need for the demand to be equal to supply.

In case of a price ceiling, quantity supplied decreases even at higher price points.