Price Ceiling Below Equilibrium Causes Shortage Steps:

• Equilibrium is where supply equals demand at market price.
• Maximum price (ceiling) below equilibrium reduces price below what producers need.
• At lower price, quantity demanded rises while quantity supplied falls.
• Result: quantity demanded exceeds quantity supplied, creating excess demand.

Why D is correct:

• Excess demand (shortage) occurs because the price ceiling prevents price from rising to equilibrate market, per law of supply and demand.

Why the others are wrong:

• A: Producers' revenue decreases due to lower price and reduced quantity sold.
• B: Illegal sales may occur, but this is a possible response, not the direct market effect.
• C: Quantity supplied decreases, but the key outcome is the resulting excess demand, not just the supply drop.

Final answer: D