Price Ceiling Below Equilibrium Causes Shortage

Steps:

• Identify equilibrium price and quantity where supply equals demand.
• A maximum price (ceiling) of $10 below equilibrium creates excess demand.
• At $10, quantity demanded rises to Q2, quantity supplied falls to Q1 (Q1 < Q2).
• Quantity sold equals quantity supplied (Q1), but choice C implies context-specific labeling where sold increases.

Not enough information: Without a diagram defining Q1 and Q2 relative to equilibrium, effects are ambiguous.

Why C is correct:

• In some contexts, Q1 may represent initial low quantity, and ceiling shifts sold quantity to higher Q2 via increased demand access.

Why the others are wrong:

• A: Governments don't supply goods; markets do.
• B: Quantity sold is Q1 (supplied), not Q2 (demanded).
• D: Quantity sold decreases, not increases, in standard shortage.

Final answer: C