question archive Give an example of a government-imposed factor that disrupts the market equilibrium

Give an example of a government-imposed factor that disrupts the market equilibrium

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Give an example of a government-imposed factor that disrupts the market equilibrium. Discuss how would that factor affect the consumer/producer.

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Take for example the price ceiling that the government sets for certain goods or services. This is mainly meant to help those who cannot afford the good to ensure they are able to get it. Thus price it too high means that there is market disequilibrium as people will tend not to buy. This, therefore, affects the demand and supply of the factor may be the factor is Land, people will thus tend to move out if at all the prices were to increase. Setting the price ceiling below equilibrium is essential as it creates surplus shortage as a result of increased demand in the short run.