MR PD Smith has heard that the government has proposed the imposition of a maximum price or  price ceiling in the market for his product. He does not understand the implications of this proposed  price ceiling on equilibrium in the market and has asked you to provide some clarity.  The manufacturer would like to know the following:  What is a price ceiling and why would the government want to impose a price ceiling?  What impact would the imposition of the price ceiling have on equilibrium in the market?  Please explain the impact on equilibrium with the aid of a graph.

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