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Figure: Understanding Price Ceilings and Floors
-(Figure: Understanding Price Ceilings and Floors)In the graph,a price of $50 would allow for an effective price ceiling.

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Figure: Understanding Price Ceilings and Floors 
-(Figure: Understanding Price Ceilings and Floors)In the graph,a price of $50 would allow for an effective price ceiling.

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The graph shows that a price ceiling of $50 would be ineffective because the equilibrium price is above $50, meaning that suppliers will not be willing to supply enough goods to meet the quantity demanded at that price. A price ceiling can only be effective if it is set below the equilibrium price.

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