Question

if the equilibrium price of natural gas is $4 per thousand cubic feet and a price ceiling is imposed at $3 per thousand cubic feet, the result will be:
a. a surplus of natural gas.
b. an accumulation of inventories of unsold gas.
c. more natural gas available than what buyers want to buy.
d. a shortage of natural gas.

Explanation:

A price ceiling set below the equilibrium price ($3 < $4) will increase the quantity of natural gas demanded by buyers (since it's cheaper) and decrease the quantity supplied by sellers (since it's less profitable). When quantity demanded exceeds quantity supplied, a shortage occurs. Options a, b, and c describe outcomes of a price floor (above equilibrium), not a binding price ceiling.

Answer:

d. a shortage of natural gas.