Assume a Market Price Is Set Artificially Low

Multiple Choice

Assume a market price is set artificially low. In other words, the price is set below the equilibrium price. How will this affect the market?

A) Every producer loses surplus, and it all gets transferred to consumers.
B) Some producers drop out of the market, and those left lose some surplus.
C) Every consumer gains surplus, due to the lower price now being charged.
D) None of these are correct.