A price ceiling imposed on a good that is below the equilibrium price will result in a shortage of that good.

Question

Quizplus · Accepted Answer

A price ceiling below the equilibrium price artificially restricts the price that sellers can charge for the good, leading to an increase in the quantity demanded and a decrease in the quantity supplied. This creates a shortage of the good as the quantity demanded exceeds the quantity supplied at that price.

A Price Ceiling Imposed on a Good That Is Below