When the government intervenes in the functioning of the market by fixing a ‘price ceiling’ of an essential commodity to protect the interest of the consumers, at what level the price ceiling must be fixed to be meaningful:

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KollegeApply · Accepted Answer

lower than equilibrium price Explanation: A price ceiling is effective only when it is set below the equilibrium price, making the good more affordable for consumers. This leads to excess demand (shortage), as quantity demanded exceeds quantity supplied at the imposed lower price.

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