Price Ceiling Price ceiling - Maximum price allowed by law. Effects of price ceiling Shortages Bad quality Lines and search costs Deadweight loss Misallocation of resources Shortages Bad Quality Main effect of price ceiling is that QDemanded > QSupplied. Sellers have more customers so They can cut quality, cut costs and still able to sell at the same mandated price. They can provide worse service and still be able to sell. Lines and search costs Price control does not reduce quantity de...