Price Ceiling Simulator
A maximum legal price sounds like a gift to buyers. Slide the ceiling below equilibrium and watch: shortage opens up, deadweight loss appears, a black-market price emerges. Play with rent control, WWII rationing, or Venezuelan gasoline.
Move the ceiling slider to set the legal maximum price. If it's above the free-market clearing price, nothing happens — the ceiling isn't binding. Below it, buyers want more than sellers will supply.
Ceilings solve one problem by creating four
A binding price ceiling makes the good cheaper for the buyers who get it. But it creates: shortage (Qd > Qs at the ceiling), queues and search costs (someone has to ration what's left), quality erosion (landlords defer maintenance, gas stations cut hours), and often a black market (buyers willing to pay more find sellers willing to break the law).
The classic empirical examples: rent-controlled New York apartments in the 1970s with wait lists years long; U.S. gasoline lines in 1974 and 1979 after Nixon and Carter capped prices; Venezuela in 2016, where gasoline priced under a penny per liter meant queues, resale to Colombia, and rolling shortages.
Ceilings above the market price are common political theater — they do nothing at all. The interesting question is always: is the cap binding, and if so, how are you rationing the shortage?