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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
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Oct 4th, 2015
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