If the federal government regulates a product or service in a competitive market by setting a maximum price below the equilibrium price, what is the short-run effect?

When the government imposes a Maximum Price on a competitive market, if the equilibrium price is below the maximum price, then that policy will have no effect on that market, since the current price is below the ceiling price. However, if the equilibrium price is above the ceiling price, the good will become scarce and sellers must ration it among a large number of potential buyers.

The rationing mechanism is inefficient and unfair, will generate long queues between consumers and possible discrimination by sellers, since they will not be able to sell the good to those who value it most (equilibrium price based on supply and demand) but they will sell it to whomever they prefer. Sellers may prefer to sell this good to their friends, family or even those who are willing to give an additional amount of money "under the table", thus generating a potential black market for that good.