Price ceilings Two outcomes are possible when the governmentimposes a price ceiling The price ceiling is not binding if set above the equilibrium price The price ceiling is binding if set below the equilibrium price, leading to a shortagePrice Ceilings Two outcomes are possible when the government imposes a price ceiling: • The price ceiling is not binding if set above the equilibrium price. • The price ceiling is binding if set below the equilibrium price, leading to a shortage