Initial Shortage: Changes in the Market There have been extreme shortages in disinfectant cleaning products (bleach, bleach products, disinfectant wipes, hand sanitizer etc.), personal protection products (face masks and shields) and (oddly) toilet paper and other paper products. WHY? Lets focus one type of product: hand sanitizer. Hand sanitizer is a hand washing alternative that kills the virus that swept through the world.

Continued Shortage: Legal Limitations on the Market Now, lets suppose bring price gouging back into our analysis. Simultaneous to this change in the market that you've illustrated, a state of emergency has been declared by the government enacting price gouging laws. Let's suppose that the price of the product is not allowed to change from the original equilibrium price without sanctions.

The original equilibrium price is _________________ (above or below) the new equilibrium price. If this price is not allowed to adjust, there will be a __________________ (Shortage or surplus) in the market. A price gouging law effectively becomes a price ___________________(floor or ceiling) during a crisis because prices are not allowed to adjust to the new equilibrium.