Asked by Diana Gasparyan on Jun 06, 2024
Verified
A price ceiling set above the equilibrium price of a good will result in a shortage.
Price Ceiling
A legal maximum price that can be charged for a good or service.
Equilibrium Price
The price level where the amount of products provided matches the amount of products customers want to buy.
- Comprehend the principle of market equilibrium and the influence of price ceilings and floors on market results.
- Identify the impact of price controls enforced by the government on the equilibrium between supply and demand.
Verified Answer
TD
Tracy DeniseJun 10, 2024
Final Answer :
False
Explanation :
A price ceiling set above the equilibrium price will not have any effect on the market as it is already operating below the ceiling. Therefore, there will be no shortage.
Learning Objectives
- Comprehend the principle of market equilibrium and the influence of price ceilings and floors on market results.
- Identify the impact of price controls enforced by the government on the equilibrium between supply and demand.