If the government legislates a price ceiling that is above the equilibrium price

Name: If the government legislates a price ceiling that is above the equilibrium price
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Question

Quizplus · Accepted Answer

If the government legislates a price ceiling that is above the equilibrium price, it means that the price ceiling is not binding since the market price is already below it. Therefore, the market price and quantity sold will be unaffected. There will be no shortage, surplus, or non-price rationing method.

If the Government Legislates a Price Ceiling That Is Above