ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -When a price ceiling is set below the equilibrium price, quantity demanded will exceed quantity supplied, and excess demand or shortages will result. Price floors prevent a price from falling below a certain level.

Detailed explanation-2: -When the price is below equilibrium, there is excess demand, or a shortage-that is, at the given price the quantity demanded, which has been stimulated by the lower price, now exceeds the quantity supplied, which had been depressed by the lower price.

Detailed explanation-3: -If the market price is below the equilibrium price, quantity supplied is less than quantity demanded, creating a shortage.

Detailed explanation-4: -When price is below equilibrium level, there will be a shortage of commodity in the market.

Detailed explanation-5: -Conversely, if the price of a good is below equilibrium, then it must be that the quantity of the good demanded exceeds the quantity of the good supplied-meaning that there is a shortage of the good (at the existing price).