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Introducing Supply and Demand
Government Intervention and Disequilibrium
Economics Textbooks Boundless Economics Introducing Supply and Demand Government Intervention and Disequilibrium
Economics Textbooks Boundless Economics Introducing Supply and Demand
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Economics
Concept Version 7
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Price Ceiling Impact on Market Outcome

Price Ceiling Chart

Price Ceiling Chart

If a price ceiling is set below the free-market equilibrium price (as shown where the supply and demand curves intersect), the result will be a shortage of the good in the market. The dead weight loss, represented in yellow, is the minimum dead weight loss in such a scenario. If individuals who value the good most are not capable of purchasing it, there is a potential for a higher amount of dead weight loss.

Source

    Boundless vets and curates high-quality, openly licensed content from around the Internet. This particular resource used the following sources:

    "Binding-price-ceiling."
    http://en.wikipedia.org/wiki/File:Binding-price-ceiling.svg Wikipedia GNU FDL.

Related Terms

  • Price ceiling
  • black market
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