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If a Seller Facing Excess Demand Is Unable to Raise

question 148

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If a seller facing excess demand is unable to raise the price of the good due to a price ceiling, a likely result will be:


Definitions:

Shortage

A market condition in which the demand for a product exceeds its supply at a particular price.

Market Price

The actual selling price of a good or service in the marketplace, determined by the forces of supply and demand.

Surplus

A situation in which the quantity of a good or service exceeds the quantity demanded at the current price.

Shortage

A situation in which the demand for a product or service exceeds the available supply.

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