Price Ceiling Effects

When the Price Ceiling is imposed, P is the Ceiled Price. But, Price Ceiling creates a situation of excess Demand for the Commodity. When the Price Ceiling is imposed, qd is the Quantity Demanded and qs is the Quantity Supplied.
As a result, people will not be able to buy the quantity of good that they want to buy. Hence, various measures have to be taken by the Government. For example, In the case of foods grains, ration cards which allot a fixed Quantity of good that each family can buy can be allotted. In this case, the grains are generally distributed via fair price shops in the poor nations. But this has its own disadvantages like people have to stand in long queues and often there are complaints about low quality goods, pilferage in the fair price shops, black-marketing. Thus, if the government has to impose price ceiling, then it must have a very good distribution system for the distribution of grains.