In the figure provided, a price of Pc has been set by a government price control.
Two intersecting lines are graphed. The horizontal axis is labeled Quantity and the vertical axis is labeled Price. A line with a positive slope is labeled S intersects a line with a negative slope labeled D. A horizontal dashed line segment that starts at a point labeled P subscript c baseline on the vertical axis intersects each diagonal line above the intersection point. Each of two vertical dashed line segments that start at points labeled Q subscript 1 baseline and Q subscript 2 baseline, respectively, on the horizontal axis intersect each diagonal line, running to the left and to the right of the intersection point of the diagonal lines.
Given the associated quantity demanded, Q1, and quantity supplied, Q2, which of the following describes the quantity Q2−Q1?
(1 point)
Responses
the surplus resulting from the price ceiling Pc
the surplus resulting from the price ceiling upper p subscript c baseline
the shortage resulting from the price ceiling Pc
the shortage resulting from the price ceiling upper p subscript c baseline
the surplus resulting from the price floor Pc
the surplus resulting from the price floor upper p subscript c baseline
the shortage resulting from the price floor Pc
Given the information provided, the quantity Q2 represents the quantity supplied and the quantity Q1 represents the quantity demanded.
Therefore, the quantity Q2−Q1 represents the surplus resulting from the price ceiling Pc.
So, the correct answer is: the surplus resulting from the price ceiling Pc.
The quantity Q2−Q1 represents the difference between the quantity supplied (Q2) and the quantity demanded (Q1).
Since the question mentions a government price control, specifically a price ceiling labeled Pc, we can infer that the quantity demanded (Q1) exceeds the quantity supplied (Q2). This is because a price ceiling sets a maximum price that is below the equilibrium price, leading to a shortage in the market.
Therefore, the correct answer is:
the shortage resulting from the price ceiling Pc