Lovers of opera persuade the government to impose a price ceiling of €50 per ticket, at...

Lovers of opera persuade the government to impose a price ceiling of €50 per ticket, at the country's national opera house.Does this policy get more or fewer people to attend? What does the market outcome depend on?

Expert Solution

Lovers of opera persuade the government to impose a price ceiling of €50 per ticket, at the country's national opera house, this will lead to have an increase in demand for opera tickets. Opera lovers can get the tickets at a lower price than the previous market equilibrium price , thus demand for tickets will be more , more people will attract to buy tickets. But market outcome depends upon the interaction of supply and demand, due to the lower price than equilibrium market price, supplier of opera tickets will supply less number of tickets at the celling price thus there will a shortage of supply , matrket will be in an inequilibrium situation.

Rahul Sunny answered 2 years ago

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