Question

In 1-2 sentences, explain the effect of a price ceiling on the quantity of a good.

Answer 1

They prevent a price from falling below a certain level.Price floors and price ceilings can lead to unintended consequences.

Answer 2

Answer and Explanation:

The correct answer and explanation is:

The ceiling price is binding and makes the equilibrium amount to change. The quantity demanded rises meanwhile the quantity offered declines. As a result we get a quantity shortage of the amount. Further, a loss of dead-weight is created from the price ceiling.