As the economy shifted towards a market economy, government price controls were abolished. In the diagram below, the government had originally imposed an effective maximum price. What happened to price and quantity when the government removed the maximum price?
- Aprice falls from $10 to $8; removes shortage
- Bprice falls from $10 to $8; removes surplus
- Cprice rises from $6 to $8; removes shortage
- Dprice rises from $6 to $8; removes surplus