Price ceilings cause

Question

Quizplus · Accepted Answer

When a price ceiling is imposed, suppliers who can no longer charge the market price may drop out of the market, leading to a shortage of the product. To compensate, suppliers might lower the quality of the product they supply or switch to producing items that are not price-controlled. Consumers may turn to a black market, where prices are higher than the controlled price, to obtain the good or service they want. Thus, all of the above outcomes can occur when a price ceiling is imposed.

Price Ceilings Cause