What is a common effect of implementing a price ceiling?

Implementing a price ceiling typically leads to shortages of goods because it sets a maximum price that sellers can charge, which is often below the market equilibrium price. When prices are artificially lowered, more consumers are incentivized to purchase the product due to its lower cost. However, producers may be less willing or able to supply the same quantity of goods at the reduced price, as it may not cover their costs. This imbalance between the quantity demanded and the quantity supplied results in a shortage, as the demand exceeds the available supply at that price level.

In contrast, other options such as increased production, higher quality of goods, or stable prices are generally not the outcomes of a price ceiling. Higher prices typically encourage more production, and price controls can lead to lower quality as producers may cut corners to maintain profitability under constrained pricing. While a price ceiling can maintain stable prices for consumers, it often does so at the cost of availability, leading to the primary effect of shortages.