maximum price/price ceiling- full market impact

Question 1

what is maximum price/ price ceiling and what is it used for

Answer 1

-a fixed price enacted by the government usually set below the market equilibrium
-it is used to increase the affordability of necessities

Question 2

effect of max pricing on the graph

Answer 2

-a straight line below market equilibrium
-price: will fall
-qd: will rise
-qs: will fall
-excess demand: qd-qs
-producer revenue: this is up to the qs box