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Consumer and Producer Surplus; Price Ceilings and Floors 7m Play a video: 2m Play a video: The supply curve to shift to the right The demand curve to shift to the right below last year’s average price above the equilibrium price by knowledgeable government officials below the equilibrium price an eventual decline in the number of suppliers the need to use ration coupons to purchase a good landlords failing to maintain rent-controlled properties adequately 6 conceptPrice Floors and Black Markets 8m Play a video: 2m Play a video: A price floor above the competitive equilibrium price will result in a surplus. A price ceiling above the competitive equilibrium price will result in a surplus. A price ceiling below the competitive equilibrium price will result in a shortage. A nonbinding price floor will result in a quantity exchanged that is equal to the equilibrium quantity What happens if a price ceiling is set above the equilibrium price?Case 2: The price ceiling is above the equilibrium price. In this case, there will be an overproduction of the quantity supplied, and a lower willingness to pay from consumers. This decreases the economic surplus and creates deadweight loss.
What is the impact on the market if a price ceiling is set above the equilibrium price below the equilibrium price?Price ceilings prevent a price from rising above a certain level. When a price ceiling is set below the equilibrium price, quantity demanded will exceed quantity supplied, and excess demand or shortages will result. Price floors prevent a price from falling below a certain level.
What is the effect of a price ceiling that is set above the market equilibrium quizlet?If a price ceiling is set above the equilibrium price: neither the equilibrium price nor the equilibrium quantity will be affected. If the price ceiling is set above the equilibrium price, it has no effect because the free market equilibrium remains attainable.
How does the price ceiling affect the equilibrium price?Price ceilings prevent a price from rising above a certain level. When a price ceiling is set below the equilibrium price, quantity demanded will exceed quantity supplied, and excess demand or shortages will result. Price floors prevent a price from falling below a certain level.
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What is the effect of a price ceiling that is set above the market equilibrium?
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