Ask Question
8 January, 12:21

What is a possible unintended effect of a price floor and price ceiling?

+1
Answers (1)
  1. 8 January, 12:51
    0
    Price ceilings prevent a price from rising above a certain level. When a price ceiling is set below the equilibrium price, quantity demanded will exceed quantity supplied, and excess demand or shortages will result. Price floors prevent a price from falling below a certain level. When a price floor is set above the equilibrium price, quantity supplied will exceed quantity demanded, and excess supply or surpluses will result. When government laws regulate prices instead of letting market forces determine prices, it is known as price control.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “What is a possible unintended effect of a price floor and price ceiling? ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers