Question

Does a price ceiling change the equilibrium price?

Short answer

A price ceiling is simply a legal limitation. Equilibrium is a financial requirement. Individuals may or may not follow the price ceiling, so the genuine cost may be at or exceeding the price ceiling, but the price ceiling doesn't vary the equilibrium price.

Step-by-step solution

Concept introduction

A price ceiling choice causes the amount required to increase and the amount provided to lose. The price ceiling is why a price ceiling makes a deficiency.

Explanation

The equilibrium price in any demand lives the expense at which the quantity mandated equals the amount provided.