Higher education has become increasingly expensive and hence education now costs much more than it did before. One of the ways the government controls prices is by setting a floor or a ceiling on the market.
Explain what might happen in the market for higher education if the government placed a price ceiling on the cost of one undergraduate credit hour. Explain your answers using economic theory on impacts of price ceiling on market equilibrium.
What are the impacts of pricing ceiling market equilibrium in education market?
Does it matter whether or not the ceiling is set above or below the equilibrium price?
Who might benefit from this price restriction? Who might be harmed from this price restriction?