The price control which was used is a price ceiling of $1,000. Notice that the Quantity Demanded was 600,000 at the price of $1,000 but supply was only 300,000 thus creating a shortage.
The Law of Supply
Recall the law of supply. All things being equal, supply moves in the same direction as price. That is price increases cause an increase in supply and vice versa.
In the schedule above, the government restricted prices from rising above $1000. This left supply at 300,000 units.
Also notice that when the price increased to $1,500, supply increased to 500,000 which is equal to demand. This kind of situation is called an Equilibrium market.
See the link below for more about the law of supply:
https://brainly.com/question/1354195
