I’m studying for my Economics class and don’t understand how to answer this. Can you help me study?
Due to Covid-19, the demand for face masks has escalated. Assume that the government chooses to impose a price ceiling of $0.10 (per unit) for good quality 100% cotton masks starting September 15, 2020.
1. What’s the objective of this policy? In other words, why would the government want to do this?
2. Is this price ceiling likely to be above or below market equilibrium?
3. How will the market of face masks be affected? Provide at least 3 consequences.
Note: One of the consequences has to be an economic impact such as those learned in the video lessons. Feel free to provide your opinion with regards to the remaining two consequences. Also, feel free to include additional consequences and/or thoughts.