Why is the answer false?
I thought that once a price ceiling has been established, you can only buy goods at lower prices.
I'm confused.
Homework Answers
Answer
False
The price ceiling is a maximum price can a producer charge if it is binding then the price ceiling should be below the equilibrium price.
Now the price is below the equilibrium price means the quantity supplied at the price is less than the quantity demanded at the price which means all the consumers will not get the good in the market so at the price consumer can get only a limited quantity or no quantity because the market is in shortage.
Shortage =Qd-Qs
Qd>Qs in this market.
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