In order for a price ceiling to be binding, it must be set _______ the equilibrium price, and it will likely cause _______.

Question

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A price ceiling is a government-imposed limit on how high a price can be charged for a good or service. In order for it to be binding, it must be set below the equilibrium price. If it is set above the equilibrium price, it will not have any effect on the market. When a price ceiling is set below the equilibrium price, it will likely cause a shortage because the quantity demanded will exceed the quantity supplied at the lower price.

In Order for a Price Ceiling to Be Binding, It