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22 August, 11:06

If the price ceiling is below $70, quantity supplied and quantity demanded differ. Quantity supplied Quantity demanded Quantity supplied will determine how much oil is purchased.

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  1. 22 August, 11:15
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    When a price ceiling is set below $70 (the equilibrium price), the quantity demanded will usually increase over quantity supplied.

    Explanation:

    Note that a price ceiling restraints the price of commodity from rising above a certain level. This is usually done by Governmental to control prices.

    In the case of oil prices assuming the equilibrium price (the price where demand and supply is equal) is $70 and the price ceiling is made below it by a new law, we should expect the quantity demanded to exceed the supply; following the laws of demand and supply.
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