If there is a ceiling price below the equilibrium level, a decrease in demand will worsen the shortage.

Question

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If there is a ceiling price below the equilibrium level, there is already a shortage because the quantity demanded exceeds the quantity supplied. A decrease in demand will actually alleviate the shortage, as the gap between the quantity demanded and quantity supplied will decrease. However, the shortage will still persist as long as the ceiling price is in place.

If There Is a Ceiling Price Below the Equilibrium Level