Figure 4-14 Figure 4-14 Depicts the Milk Market

Multiple Choice

Figure 4-14 Figure 4-14 depicts the milk market. The horizontal line, P, represents a price ceiling imposed by the government. Which of the following is true?

A) In equilibrium, the quantity demanded is 800 gallons.
B) At the ceiling price, there is a surplus.
C) The quantity demanded at the price ceiling will equal the quantity supplied.
D) The equilibrium price would be $1 per unit without the price ceiling.
E) The quantity sold will be 500 gallons.