What would price ceiling lead to when the maximum price is fixed lower than the equilibrium price?

Excess Demand.

The correct answer is Option (3) → Excess Demand.

A price ceiling is a government-imposed maximum price set below the market equilibrium price to make essential goods more affordable.

When this maximum price is fixed lower than the equilibrium price:

• The quantity demanded increases because the price is lower.

• The quantity supplied decreases because producers are less willing to supply at the lower price.

This creates a situation where demand exceeds supply, resulting in excess demand or shortage in the market.