Although a price ceiling sets a maximum price that sellers can charge for a good, such a policy could harm consumers.

Question

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While a price ceiling may seem like a measure to protect consumers from high prices, it can have negative consequences. It can lead to shortages, reductions in quality, and black markets. Sellers may also be less incentivized to produce the good if they are unable to charge a higher price.

Although a Price Ceiling Sets a Maximum Price That Sellers