Answer:
A. set below the equilibrium price encourages illegal trading in a black market
Explanation:
Price Ceiling is maximum mandated price at which a good can be sold in market. It is usually set below equilibrium price level, to protect consumers from overpricing under free markets.
Price ceiling at a lower price creates Excess Demand or shortage of good (Demand > Supply) , as demand is more at lower prices but supply is less at lower prices. This shortage leads to sellers selling in Black markets at illegal higher price, to buyers having unsatisified demand & higher willingness to pay.
