An effective price ceiling is set the market equilibrium price and results in a

Below the market equilibrium and results in a shortage

Explanation: Price ceiling is a benchmark placed by Government or other regulatory bodies on the amount to paid for the purchase of certain commodity, product and services rendered.

An example of a price ceiling is the priced fixed by Government on landlords in a given area for the rent of apartments.

The negative impact of price ceiling is that it can lead to shortage in supply of a product or service whose price has been fixed because producers and services providers don't find the business profitable any longer.

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