Question

Many of the proponents of price ceilings argue that government-mandated maximum prices simply reduce producers' profits and do not affect the quantity supplied of a good on the market. What must the supply curve look like if the price ceiling does not affect the quantity supplied

Answer 1

the supply curve must be vertical

Step-by-step explanation:

A horizontal supply curve is perfectly inelastic. This means that the price of a good or service will not affect the quantity supplied. In other words, the quantity supplied is not affected by an increase or a decrease of the good's price. This type of situation is basically theoretical, or may exist for a very short period of time where the availability of a good is very low. But in the real world, it cannot hold for significant periods of time.