If the equilibrium price of petrol is €1.00 per litre and the government places a price ceiling on petrol of €1.50 per litre, the result will be a shortage of petrol.

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A price ceiling is a maximum price that can be charged for a good or service. In this case, the government has set a maximum price of €1.50 per litre for petrol, which is higher than the equilibrium price of €1.00 per litre. Therefore, there is no reason for suppliers to reduce their price, and there is no incentive to increase the supply of petrol. As a result, there is likely to be excess demand or a shortage of petrol at the price ceiling of €1.50 per litre.

If the Equilibrium Price of Petrol Is €1