Economics Supply And Demand Questions
A price ceiling is a government-imposed maximum price that can be charged for a good or service. It is set below the equilibrium price determined by the market forces of supply and demand. The impact of a price ceiling on the market is that it creates a shortage of the good or service, as the quantity demanded exceeds the quantity supplied at the artificially low price. This can lead to long waiting times, black markets, and reduced quality of the product.