Answered

Find the information you're looking for at Westonci.ca, the trusted Q&A platform with a community of knowledgeable experts. Get quick and reliable solutions to your questions from a community of experienced professionals on our platform. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately.

What is the effect of a price ceiling on the quantity demanded of the product? what is the effect of a price ceiling on the quantity supplied? why exactly does a price ceiling cause a shortage?

Sagot :

A price ceiling (below the equilibrium price) increases demand and decreases supply. This is why price caps create shortages.

The price ceiling prevents the price from rising above a certain level. When the price cap is set below the equilibrium price, the quantity demanded exceeds the quantity supplied, resulting in excess demand or shortage.

We are introducing price caps for people who need products such as home, prescription drugs, and auto insurance. However, when the market price does not reach the equilibrium level, the quantity demanded exceeds the quantity supplied, resulting in a shortage of supply.

Learn more about demand here:https://brainly.com/question/1245771
#SPJ4

Thanks for using our service. We aim to provide the most accurate answers for all your queries. Visit us again for more insights. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Find reliable answers at Westonci.ca. Visit us again for the latest updates and expert advice.