If the equilibrium price of a product is above the price ceiling set by the government, there will be a surplus in the market.

Question

Quizplus · Accepted Answer

If the equilibrium price is above the price ceiling set by the government, it means the government is mandating a lower price than what the market is dictating. This creates a shortage of the product because demand exceeds supply at the lower price, not a surplus.

If the Equilibrium Price of a Product Is Above the Price