The graph shows the price of a good compared to the quantity demanded and the quantity supplied. A graph titled Price Controls Graph 1 has Quantity on the x-axis and price on the y-axis. Demand has a negative slope and supply has a positive slope. Points are on the demand line and the supply line at the same price. Excess supply is indicated between the 2 points. Both points are above the point of equilibrium. On this graph, the top horizontal line represents a price floor set above equilibrium. a price floor set below equilibrium. a price ceiling set above equilibrium. a price ceiling set below equilibrium.

When interpreting the description of the graph described above, we can say that the upper horizontal line represents a situation where there is a lot of demand and little supply of the same product. This situation results in excess demand and excesses of the product.

When this situation occurs, we have an example of a price ceiling established below the equilibrium point between demand and supply.

In this case, it is important to mention that the price ceiling is the term that defines the maximum price that a product can reach.

mahak08 mahak08 · Answer 2 · 2021-11-27T13:33:23+01:00

When analyzing the graph's description, we may state that the higher horizontal line reflects a situation in which there is a lot of demand for a product but little supply.

As a result of this circumstance, there is an excess of demand and product.

When this happens, we have an example of a price ceiling that has been set below the demand-supply equilibrium point.

In this scenario, it's vital to note that the price ceiling refers to the highest price that a product can achieve.

So, Option D is correct.

The other Options are incorrect as:

Option A is incorrect as When a price floor is set higher than the equilibrium price, the amount supplied exceeds the quantity required, resulting in excess supply or surpluses.

Option B is incorrect as When a price ceiling is set lower than the equilibrium price, the quantity requested exceeds the amount supplied, resulting in excess demand or shortages.

Option C is incorrect as If a price ceiling is placed higher than the equilibrium price, neither scarcity nor a surplus of the goodwill exist. A price ceiling that is higher than the equilibrium price has no effect.

Thus Option D is correct about the graph described in the question.

For more information about the price ceiling refer to the link:

https://brainly.com/question/13386270