Option 1 -> At price ceiling Rs. 25: Qd = 200-25 = 175, Qs = 120+25 = 145. Excess demand = 175-145 = 30 units, not 25.
Option 2 -> Price ceiling below equilibrium creates shortage (excess demand), not excess supply.
Option 3 -> At price ceiling Rs. 25: Qd = 200-25 = 175, Qs = 120+25 = 145. Excess demand = 175-145 = 30 units.
Option 4 -> Price ceiling below equilibrium creates shortage (excess demand), not excess supply.
Hence, Excess demand for 30 units -> A price ceiling is a maximum price set below the equilibrium price. At Rs. 25 (below equilibrium Rs. 40), quantity demanded (175 units) exceeds quantity supplied (145 units), creating excess demand of 30 units. This shortage occurs because consumers want to buy more at the lower price, but suppliers are willing to supply less -> correct