Question

Governments often implement price ceilings to protect consumers from the high prices of essential goods and services that frequently
follow natural disasters. One unfortunate side effect of these price ceilings is that they will likely (1 point)
fallinn to their poilibrium level

Answer 1

Price ceiling are measure employed by government to help the consumers by mandating a maximum price that the seller must charge for a product or service.

• The measure of imposing price in market are rare but are notably used during natural disasters.

• Price ceiling helps to prevent the producers from exploiting the consumers.

In conclusion, the major disadvantage of price ceiling is that when a price ceiling is set below the equilibrium price, the quantity demanded will exceed quantity supplied, thus, this will result to excess demand of goods and shortage in the market.

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