microeconomics college

Economics
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Suppose a price ceiling is imposed by the government on a medical procedure (i.e. root canal) above the market equilibrium price. The likely result will be:

Oct 3rd, 2015

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Generally, a price ceiling is usually imposed below the market equilibrium price. In this case, such a ceiling causes a shortage immediately. This is so because the level of demand increases at the created lower price. However, in the case of a price ceiling above the market equilibrium price, there will be no effect of the demand and supply of the given item. This is so because people will be willing to pay at the equilibrium price. Customers will not pay at a price higher than what the market offers. Thus, such a price ceiling on a medical procedure over the equilibrium price by the government will not lead to any significant effect in the market equilibrium. 

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Oct 4th, 2015

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