In a scenario with a price ceiling set below equilibrium price, what is likely to occur?

Setting a price ceiling below the equilibrium price creates a situation where the maximum price that can be charged for a good or service is lower than what the market would normally bear. In this scenario, sellers are unable to charge a price that reflects the demand for their goods. As a result, the quantity of goods demanded by consumers at this lower price exceeds the quantity supplied by producers willing to sell at that price.

This mismatch leads to a shortage, as there are more buyers wanting to purchase the goods than there are goods available for sale. The lower price incentivizes more consumers to enter the market while discouraging suppliers from producing as much due to reduced profit margins, further exacerbating the shortage.

Overall, when a price ceiling is implemented below the equilibrium price, it disrupts the natural balance of supply and demand, leading to imbalances such as shortages, which is a common economic outcome in these situations.