The government sometimes creates an excess demand for a product by setting a maximum price at which the product may be sold to consumers. This is sometimes called a

Question

Quizplus · Accepted Answer

Setting a maximum price at which a product may be sold is known as a price ceiling. This results in excess demand because the price is artificially low and more consumers are willing to purchase the product than the amount that is available.

The Government Sometimes Creates an Excess Demand for a Product