Homework SourseA price ceiling above the equilibrium price will It is argue
A price ceiling above the equilibrium price will
It is argued that US Food Aid:
| result in the demand curve shifting left |
Solution
1) A price ceiling above the equilibrium price will \"result in anyone willing and able to buy the good to be able to buy it with no surplus\".
A price ceiling prohibits the seller to sell the product above that price. If that ceiling is set above the equilibrium price it will be ineffective. Anyone who wants to buy the product will buy it at that price without creating any surplus.
2) The US food aid \"is a cost-effective way to assist the world\'s poor\"
Other options are just wrong subsidies to large corporations doesn\'t create a food surplus and free market will result in a match of demand and supply creating an equilibrium.
The US system of price ceiling will create a shortage in the market if set below the equilibrium price and will be ineffective above the equilibrium price. ITs the price floor which creates a surplus.
