Question

a local farmers market introduces a new line of organic vegetables that quickly becomes popular among health - conscious consumers. the sudden popularity leads to an increase in the demand for these organic vegetables. the graph shows the supply and initial and new demand for the organic vegetables. if a price ceiling is imposed at $30 in a market with the new demand curve, what will be the effect on the market? the price ceiling will lead to a shortage. the price ceiling will lead to a surplus. the price ceiling will cause prices to rise above $30. the price ceiling will have no effect on the market.

Explanation:

A price - ceiling is a legal maximum price. If the price ceiling is set above the equilibrium price (the new equilibrium with the new demand curve), it will have no effect on the market because the market can operate freely at the equilibrium price which is below the price - ceiling. In the given scenario, the new equilibrium price (from the intersection of new demand and supply) is below $30. So, a price - ceiling of $30 will not bind the market and thus have no effect.

Answer:

The price ceiling will have no effect on the market.