How do governments correct a price ceiling?

Question

i know that there would be a shortage in supply as demand would be greater than supply. but how do governments correct this? do they increase supply? what would be the effect of this?

Answer 1

If a government wants to correct this problem they would most likely do it by allowing the price to go up a little.  Which would increase the quantity supplied and decrease the quantity demanded.  In other words, they let the market get a little closer to the free market equilibrium.  This all depends a lot on why they established the price ceiling in the first place of course.