Concept
Version 7
Created by Boundless
Price Ceiling Impact on Market Outcome
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
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