Question

Alarmed by continuing price rises for sealing wax, King Robert Baratheon declares that henceforth, the price of sealing wax in the Seven Kingdoms of Westeros shall be no higher than 10 Silver Stags. Before the declaration of this price ceiling, the price of sealing wax had been 8 Silver Stags. From this information, we can conclude that

Answer 1

Price ceiling is a situation when government imposed certain price control (maximum price decided by government) on commodity or service to stop it become highly expensive. In other words price ceiling is a government imposed limit or control of price on any goods or service to make it affordable. In above case the price ceiling is 10 silver stag where before the price of commodity was 8 silver stag which shows that price ceiling is more than equilibrium price it concludes that there will be surplus in quantity supplied as at higher price demand is low and supply is high.