Question

If a seller facing excess demand is unable to raise the price of the good due to a price ceiling, a likely result will be:

Answer 1

A likely result will be a decrease in the quality of a product.

The fee ceiling is a state of affairs while the price charged is greater than or less than the equilibrium fee decided with the aid of market forces of demand and deliver. It's been found that higher price ceilings are useless. price ceiling has been discovered to be of extraordinary importance within the residence rent marketplace.

A price ceiling is a legal maximum rate that one will pay for some good or carrier. A government imposes rate ceilings as a good way to preserve the price of some necessary precise or services low-cost. as an example, in 2005 at some stage after Hurricane Katrina, the price of bottled water expanded above $five according to the gallon.

A rate ceiling continues a fee from growing above a sure level (the “ceiling”), even as a fee ground continues a rate from falling underneath a given degree (the “ground”). This phase uses the call for and delivers a framework to research price ceilings. the following section discusses rate flooring.

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