Government interventions disrupting market equilibrium

Steps:

• Identify market equilibrium where supply equals demand, setting price and quantity.
• Evaluate each intervention's shift: taxes shift supply left, ceilings/floors fix prices, subsidies shift supply right.
• Check impact on price and quantity: seek measure lowering both from equilibrium.
• Compare: only price ceilings below equilibrium reduce both.

Why B is correct:

• A maximum price (price ceiling) below equilibrium fixes price lower, causing shortage where quantity supplied (and traded) falls below equilibrium, per supply-demand law.

Why the others are wrong:

• A. Indirect tax shifts supply curve left, raising equilibrium price while lowering quantity.
• C. Minimum price above equilibrium creates surplus, raising price but lowering traded quantity to demand level.
• D. Subsidy shifts supply right, lowering price and increasing quantity traded.

Final answer: B