Outcome: Price Ceilings

What you’ll learn to do: analyze the consequences of the government setting a binding price ceiling

In this outcome, we will learn what happens when prices are held below a certain level. Governments typically set a price ceiling to protect consumers by making necessary products affordable, but in this section you’ll see how this sometimes backfires by creating a market shortage or other unintended consequences.

The specific things you’ll learn to do in this section include:

  • Identify the market’s equilibrium price and quantity under a price ceiling
  • Compute and graph the market shortage resulting from a price ceiling

LEARNING ACTIVITIES

The learning activities for this section include:

  • Reading: Price Ceilings
  • Self Check: Price Ceilings

Take time to review and reflect on each of these activities in order to improve your performance on the assessment for this section.

License

Icon for the Creative Commons Attribution 4.0 International License

ACC Principles of Microeconomics by Lumen Learning is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.