Question

Assume that the price of first-year college tuition has become very high, and you want to recommend a price ceiling to remedy the problem. What would the consequences of such a policy be for both students and the college? Explain your reasoning.​

Answer 1

Excess Demand & Black Selling are consequences of Price Ceiling

Step-by-step explanation:

Price Ceiling is the fixing of upper benchmark of price, above which goods & services cant be sold. It is usually fixed below the equilibrium price, to protect the interest of consumers.

Price ceiling of college tuition fee implies that - There is excess demand of college seats, as lower price implies more demand & less supply. It could also lead to prospective case of black selling, eg - college seats being supplied at higher price in the name of management quota donation (etc).