numbers, which would be hypothetical in any case, but instead focuses on the underlying economic

relationships. Imagine a law imposes a price ceiling that holds the interest rate charged on credit cards at the
rate Rc, which lies below the interest rate R0 that would otherwise have prevailed in the market. The horizontal
dashed line at interest rate Rc in Figure 4.8 shows the price ceiling. The demand and supply model predicts
that at the lower price ceiling interest rate, the quantity demanded of credit card debt will increase from its
original level of Q0 to Qd; however, the quantity supplied of credit card debt will decrease from the original Q0
to Qs. At the price ceiling (Rc), quantity demanded will exceed quantity supplied. Consequently, a number of

people who want to have credit cards and are willing to pay the prevailing interest rate will find that companies

are unwilling to issue cards to them. The result will be a credit shortage.
{"source": "downloads\\business\\economics\\Microeconomics3e.pdf", "creationdate": "2022-12-07T14:15:44-06:00", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "producer": "Prince 14.2 (www.princexml.com)", "uploaded_via": "batch_uploader", "moddate": "2022-12-07T14:23:05-06:00", "total_pages": 597, "upload_timestamp": "2026-02-07T15:37:44.339247", "title": "Principles of Microeconomics 3e", "file_name": "Microeconomics3e.pdf", "batch_upload": true, "file_type": ".pdf", "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_size_mb": 26.99, "creator": "PDFMiner"}