Final answer:
A shortage persists when the price is not allowed to rise to the equilibrium level due to a price ceiling, leading to excess demand over supply.
Step-by-step explanation:
A shortage persists when the price is not allowed to adjust below the equilibrium level due to price ceilings.
Price ceilings are enacted in an attempt to keep prices low for those who need the product. However, when the market price is not allowed to rise to the equilibrium level, quantity demanded exceeds quantity supplied, resulting in a shortage.
The impact of a price ceiling is that it typically benefits those who manage to purchase the product at the lower price, but disadvantages sellers and potentially excludes others from purchasing the product. Moreover, quality of the goods or services in question may deteriorate as a result of the price ceiling.
Conceptually, while the intention behind price ceilings is to aid consumers, the long-term effects can lead to sustained shortages, which harms the overall market and its participants. This is a fundamental concept in economic studies, addressing how market interventions can impact supply and demand.