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What causes a shortage of goods price ceiling or price floor Which causes a surplus?
if, at a current price there is a shortage of a good
What is one effect of a price ceiling?
A shortage of supply
What is one effect of price ceiling?
shortage of supply
What is causes a surplus price ceiling or price floor?
A price floor can cause a surplus while a price ceiling can cause a shortage but not always.
How does a price ceiling undermine the rationing function of market-determined prices?
A price ceiling will undermine the rationing function of market-determined prices by creating a shortage. This is a price which is below equilibrium which will lead to more demand that supply that will cause a shortage.
What causes a shortage of a good - a price ceiling or a price floor?
if, at a current price there is a shortage of a good
What causes a shortage of goods price ceiling or price floor Which causes a surplus?
if, at a current price there is a shortage of a good
What is one effect of price ceiling?
shortage of supply
What is one effect of a price ceiling?
A shortage of supply
What is causes a surplus price ceiling or price floor?
A price floor can cause a surplus while a price ceiling can cause a shortage but not always.
What rationing is an attempt to limit shortage that naturally result from what?
Price ceiling
How does a price ceiling undermine the rationing function of market-determined prices?
A price ceiling will undermine the rationing function of market-determined prices by creating a shortage. This is a price which is below equilibrium which will lead to more demand that supply that will cause a shortage.
What price must a price ceiling be less than for it to result in a shortage?
It must be less than the equilibrium price.
Explain why shortages and surpluses are not temporary when price controls are used?
If the price ceiling is above the market price then there's no direct effect. If the price ceiling is set below the market price, then a shortage is created. :)
What are some advantages and disadvantages of price ceiling?
lowers the supply of good creates a shortage
In order to limit the shortage that naturally results from a price ceiling the government can do what to certain goods?
Ration
What is the purpose of a price ceiling?
A price ceiling protects the poorest consumers by keeping goods affordable.
