Price ceilings are only effective when they are placed below the market equilibrium price.

Name: Price ceilings are only effective when they are placed below the market equilibrium price.
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Question

Quizplus · Accepted Answer

Price ceilings prevent prices from rising above a certain level. When set below the market equilibrium, they become effective because they are lower than what the market would naturally set, thus directly impacting the market by potentially causing shortages.

Price Ceilings Are Only Effective When They Are Placed Below