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


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.