In a market with a binding price ceiling, increasing the ceiling price will increase the quantity supplied, decrease the quantity demanded, and reduce the shortage.
What is a Price Ceiling?
This refers to the highest price to which a good can be sold and this is used to protect the consumers from having to buy a good at very expensive prices.
Hence, we can note that in a market with a binding price ceiling, an increase in the ceiling price will increase the quantity supplied, decrease the quantity demanded, and reduce the shortage.
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