The green arrow represents an effective price ceiling set below equilibrium causing a shortage.
Equilibrium is the point where the quantity demanded equal quantity supplied.
On a graph, it is where the demand curve crosses the supply curve.
The price at equilibrium is known as equilibrium price and the quantity at equilibrium is known as equilibrium quantity
Above equilibrium, quantity supplied exceeds quantity demanded and there is a surplus. Below equilibrium, quantity demanded exceeds quantity supplied and there is a shortage.
A price floor is when the government establishes the minimum price of a product. A price floor is effective if it is set above equilibrium price. An effective price floor leads to a surplus
A price ceiling is when the government establishes the maximum price for a good or service. It is effective when it is set below equilibrium price. An effective price ceiling leads to a shortage
To learn more about a price ceiling, please check: https://brainly.com/question/24312330?referrer=searchResults
