How do price ceilings for gas affect the supply curve and the demand curve for gasoline?

A price ceiling is the mandated maximum amount a seller is allowed to charge for a product or service. Usually set by law, price ceilings are typically applied to staples such as food and energy products when such goods become unaffordable to regular consumers. A price ceiling is essentially a type of price control. Price ceilings can be advantageous in allowing essentials to be affordable, at least temporarily.

Supply is the amount of some goods or services a producer is willing to supply at each price. Price is what the producer receives for selling one unit of goods or service. A rise in price almost always leads to an increase in the quantity supply of that good or service, while a fall in price will decrease the quantity supplied. Demand refers to the amount of some good or service consumers are willing and able to purchase at each price. If the price ceiling were fixed below the market price, supply would no longer meet demand.

Answer by Academic.tip's expert
An answer to this question is provided by one of our experts who specializes in business & economics. Let us know how much you liked it and give it a rating.

Cite this page

Select a citation style:

References

Academic.Tips. (2023) 'How do price ceilings for gas affect the supply curve and the demand curve for gasoline'. 12 February.

Reference

Academic.Tips. (2023, February 12). How do price ceilings for gas affect the supply curve and the demand curve for gasoline? https://academic.tips/question/how-do-price-ceilings-for-gas-affect-the-supply-curve-and-the-demand-curve-for-gasoline/

References

Academic.Tips. 2023. "How do price ceilings for gas affect the supply curve and the demand curve for gasoline?" February 12, 2023. https://academic.tips/question/how-do-price-ceilings-for-gas-affect-the-supply-curve-and-the-demand-curve-for-gasoline/.

1. Academic.Tips. "How do price ceilings for gas affect the supply curve and the demand curve for gasoline?" February 12, 2023. https://academic.tips/question/how-do-price-ceilings-for-gas-affect-the-supply-curve-and-the-demand-curve-for-gasoline/.


Bibliography


Academic.Tips. "How do price ceilings for gas affect the supply curve and the demand curve for gasoline?" February 12, 2023. https://academic.tips/question/how-do-price-ceilings-for-gas-affect-the-supply-curve-and-the-demand-curve-for-gasoline/.

Work Cited

"How do price ceilings for gas affect the supply curve and the demand curve for gasoline?" Academic.Tips, 12 Feb. 2023, academic.tips/question/how-do-price-ceilings-for-gas-affect-the-supply-curve-and-the-demand-curve-for-gasoline/.

Copy