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6 June, 11:44

Suppose that the average cost of a doctor visit is $100. If the government imposes a price ceiling of $50 on the cost of a doctor visit, there will be:

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  1. 6 June, 12:10
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    there will be excess demand of doctor visits

    Explanation:

    Price ceiling is a regulation by the government to keep a good or service to be sold at or below a certain price limit. This means that the government is keeping the price from rising above a certain level. The main reason why a government would do that is to protect consumers from being exploited through being charged exorbitant prices. In this case, limiting the cost of doctors visit to $50 max from the average $100 will lead to excess demand by customers.
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