Suppose a price ceiling is placed on rice. The price ceiling is set above the equilibrium price. This will result in the quantity demanded of rice exceeding the quantity supplied.

Question

Quizplus · Accepted Answer

If the price ceiling is set above the equilibrium price, it will not have any effect on the market as the suppliers will continue to supply the same quantity while the buyers will continue to demand the same quantity. This means that the quantity supplied will still equal the quantity demanded, and there will be no shortage or excess of rice in the market.

Suppose a Price Ceiling Is Placed on Rice