00:01
Hey everyone, today we're answering the problem about price ceilings.
00:06
It's a multiple choice problem.
00:08
And we're basically asked, will price ceilings affect demand, supply, both, or neither? those are our choices, a, b, c, and d.
00:18
So i'm just going to draw our normal supply and demand graph over here.
00:23
We have demand downward sloping, supply, upward sloping.
00:28
Price is on the y -axis and then quantity demanded is on the x -axis all right so what is a price ceiling well a price ceiling is going to occur over here and essentially what it is is that the demand is a lot more than the supply for a particular good or service so what this causes right here is called a shortage sorry about that so it's called a shortage.
01:14
So whenever you think of price ceilings, think of shortages.
01:18
All right.
01:19
So a price ceiling is essentially a legal maximum price.
01:22
It's usually law enforced...