Price ceilings sometimes result in some buyers and sellers purchasing the good at prohibited prices.

Question

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When the government imposes a price ceiling, it sets a maximum price that a good or service can be sold at. If the market price is higher than the price ceiling, some sellers may choose to sell their products illegally at higher prices, often in the black market. Meanwhile, some buyers may be willing to pay more than the price ceiling to secure the product, leading to shortages and long waiting lines in legal markets.

Price Ceilings Sometimes Result in Some Buyers and Sellers Purchasing