Explain some problems the government must solve, as a result of the effects of a price ceiling. Explain some problems the government must solve, as a result of the effects of a price floor.
Explain some problems the government must solve, as a result of the effects of a
Explain some problems the government must solve, as a result of the effects of a
Prices are a sensitive thing especially when they are of necessities. In some cases, discontent over prices turns into public pressure on politicians, who may then pass legislation to prevent a certain price from climbing too high or falling too low.
Laws enacted by the government to regulate prices instead of letting market forces determine them are called price controls.
A price ceiling keeps a price from rising above a certain level—the 'ceiling'.
e.g. rent control.
A price floor keeps a price from falling below a certain level—the 'floor'.
e.g. setting minimum wages.
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