FIGURE 5 A PRICE CEILING BELOW EQUILIBRIUM CREATES SHORTAGES
When the government enacts a price ceiling below equilibrium (panel A), consumers will demand Q2 and businesses will supply only Q1, creating a shortage equal to Q2–Q1, and causing deadweight loss equal to the shaded area. If the price ceiling is set above equilibrium (panel B), the price ceiling has no effect, and the market price and quantity prevail with no deadweight loss created.