If a seller facing excess demand is unable to raise the price ofthe good due to a price ceiling, a likely result will be:

Question

Quizplus · Accepted Answer

With excess demand and a price ceiling in place preventing the seller from raising prices, the seller may resort to cutting costs, such as using lower quality materials, to continue supplying the product. This would result in a decrease in the quality of the product.

If a Seller Facing Excess Demand Is Unable to Raise