Name : Hang Nguyen-TIH Problem Log #1 - Name Hang Nguyen...

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Name : Hang Nguyen Period : 3 09/17/19 TIH Problem Log #1 How do price ceilings cause shortages ? - A price ceiling occurs when the government puts a legal limit on how high the price of a product can be. In order for a price ceiling to be effective, it must be set below the natural market equilibrium. When a price ceiling is set, a shortage occurs. For the price that the ceiling is set at, there is more demand than there is at the equilibrium price. There is also less supply than
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Unformatted text preview: there is at the equilibrium price, thus there is more quantity demanded than a quantity supplied. ● What’s a black market ?-A black market is an illegal underground system for the exchange of goods developed to avoid governmental regulations. ● How do black markets solve problems of shortages ?-Black markets solve problems of shortages by some people will pay a third party a higher than legal price to get the good....
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