The General Economic Impact of Price Ceilings; Violating the Law of Supply and Demand, A Tanzanian Experience

This study examines the impact of community economic price ceilings in Tanzania was carried out in Dar es Salaam Region from February to June, 2013. The study covered around three administrative districts namely Kinondoni, Temeke and Ilala by observing different petrol stations. The main tool of data collection was observation method. Findings from this study have indicated that the general impact of economic price ceiling distorted equilibrium price, increased black market, and low quality of goods. The study also indicated that the impact of economic price ceiling through the government setting price above market price that reduced the quantity of goods also consumers evaded price ceilings by suggesting the price they want to buy as sellers hoarded goods. The study recommends that there is a need for the authority to use PCs as the temporal measure as there is tendency for the distorted equilibrium to equilibrate to the normal equilibrium ( pe) at the point where demand (DD) and Supply (SS) are equal (Qd=Qs) where people are willing to buy or sell the goods.