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| 1. |
Explain the effects of a 'Price Ceiling'. |
| Answer» <html><body><p></p>Solution :Price ceiling <a href="https://interviewquestions.tuteehub.com/tag/refers-1181652" style="font-weight:bold;" target="_blank" title="Click to know more about REFERS">REFERS</a> to fixing the <a href="https://interviewquestions.tuteehub.com/tag/maximum-556915" style="font-weight:bold;" target="_blank" title="Click to know more about MAXIMUM">MAXIMUM</a> price of a commodity that is lower than the equilibrium price.<br/>As a result of price ceiling, the <a href="https://interviewquestions.tuteehub.com/tag/market-25464" style="font-weight:bold;" target="_blank" title="Click to know more about MARKET">MARKET</a> price falls below the equilibrium price <a href="https://interviewquestions.tuteehub.com/tag/leading-1070220" style="font-weight:bold;" target="_blank" title="Click to know more about LEADING">LEADING</a> to excess <a href="https://interviewquestions.tuteehub.com/tag/demand-436956" style="font-weight:bold;" target="_blank" title="Click to know more about DEMAND">DEMAND</a>. This creates a shortage of the commodity leading to "black marketing".</body></html> | |