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AP® Microeconomics

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Moderate

Price Ceiling: Impact on Quantity

APMICR-LJEEB1

If the government imposes an effective price ceiling in a perfectly competitive market, which of the following will occur?

A

Quantity supplied and quantity demanded will both increase.

B

Quantity supplied and quantity demanded will both decrease.

C

Quantity supplied will increase, and quantity demanded will decrease.

D

Quantity supplied will decrease, and quantity demanded will increase.

E

Quantity supplied and quantity demanded will not change.