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Eliminate shortage in the market

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The exhibit given below shows the demand curve for and the supply curve of laptops, D and S1. The government decides to impose a price ceiling on the price of laptops. At the same time, the price of inverter boards that provide power to backlight lamps inside laptop screens increases. Identify the correct statement.

  • ?A price ceiling above P3 will eliminate shortage in the market.
  • ?A price of P2 will be binding in this market.
  • ?At a price ceiling of P1, the quantity demand and supplied in the market will be Q2.
  • ?The government should set the price ceiling at P1 to eliminate shortage.

Reference no: EM131507374

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