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Question

Suppose that the average cost of a doctor's visit is $100. If the government imposes a price ceiling of $50 on the cost of a doctor's visit, there will be:

an excess supply of doctor's visits.

an excess demand for doctor's visits.

an increase in the equilibrium number of doctor's visits.

no change in the number of doctor's visits.

Answer 1

excess demand.

more people want to go.

fewer doctors want to accept that price.

Answer 2

a binding price ceiling always creates excess demand  

other things constant