Refer to the information provided in Figure 4.3 below to answer the question(s) that follow.
Figure 4.3Refer to Figure 4.3. If the government will not allow retailers to charge more than $0.40 for a pencil, which of the following will happen?
A. Supply must eventually increase so that the market will come into equilibrium at a price of $0.40.
B. A nonprice rationing system such as queuing must be used to ration the available supply of pencils.
C. Demand must eventually decrease so that the market will come into equilibrium at a price of $0.40.
D. The market will be in equilibrium at a price of $0.40.
Answer: B
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