Let’s say the current administration decides to make a college education more affordable, so they establish a price ceiling of $50 per credit hour for community colleges, $75 per credit hour for four year institutions, and $100 per credit hour for graduate classes. What is a price ceiling and what effect does it have on the market? List and explain several positive and or negative consequences of this action. What would happen to producer and consumer surplus?

Answer rating: 100% (QA)

The price ceiling effectively sets a price cap on the commodity The producers will not be allowed to ... View the full answer