The government of Maxistan has imposed a price ceiling in the market for shoes and has been able to prevent black markets from forming. What is true about the market for shoes in Maxistan?

Question

Quizplus · Accepted Answer

A price ceiling below the equilibrium price typically results in a shortage because the quantity demanded exceeds the quantity supplied at that price. However, if black markets are successfully prevented, alternative costs such as queuing (waiting in line) become more significant as consumers compete for the limited supply. This does not eliminate the shortage or return the price to equilibrium, nor does it create a price floor.

The Government of Maxistan Has Imposed a Price Ceiling in the Market