rightward (or downward) shift in supply.

Step 4. A rightward shift in supply causes a movement down the demand curve, lowering the equilibrium

price and raising the equilibrium quantity.

7. A price ceiling (which is below the equilibrium price) will cause the quantity demanded to rise and the

quantity supplied to fall. This is why a price ceiling creates a shortage.

8. A price ceiling is just a legal restriction. Equilibrium is an economic condition. People may or may not

obey the price ceiling, so the actual price may be at or above the price ceiling, but the price ceiling does not

change the equilibrium price.

9. A price ceiling is a legal maximum price, but a price floor is a legal minimum price and, consequently, it

would leave room for the price to rise to its equilibrium level. In other words, a price floor below

equilibrium will not be binding and will have no effect.
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