An effective ceiling price will:

Question

Quizplus · Accepted Answer

A ceiling price is a maximum price set by the government or another authority above which a particular good or service cannot be sold, and it is usually intended to keep prices low for consumers. However, if the ceiling price is set at a level below the equilibrium price, it will cause a shortage because suppliers will not be willing to produce and sell as much of the good/service at the lower price. Therefore, option C is the correct answer as it correctly identifies the outcome of an effective ceiling price, which is a product shortage.

An Effective Ceiling Price Will