Price Control: They are some types of restrictions on the range of price in the market which are generally imposed by the government to protect the interest of consumers and producers. They are generally of two forms: Price Floor : When the government limits the minimum price, which can be charged from consumers then it is referred as a price ceiling . It may be binding or non-binding. When the minimum price is above market equilibrium price then it is binding. If the maximum price is below the market equilibrium price, then it is non-binding. Demand price: It is defined as the price at which consumer will demand the given quantity of the good. Supply price: It is defined as the price at which producer will supply the given quantity of the good. Quota: It is the limit on the supply of goods in the economy. Due to quota, there is the difference between the price received by producer and given by consumer known as a wedge.

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Chapter 4, Problem 8P

To determine

Concept Introduction:

Price Control: They are some types of restrictions on the range of price in the market which are generally imposed by the government to protect the interest of consumers and producers. They are generally of two forms:

Price Floor: When the government limits the minimum price, which can be charged from consumers then it is referred as a price ceiling. It may be binding or non-binding. When the minimum price is above market equilibrium price then it is binding. If the maximum price is below the market equilibrium price, then it is non-binding.

Demand price: It is defined as the price at which consumer will demand the given quantity of the good.

Supply price: It is defined as the price at which producer will supply the given quantity of the good.

Quota: It is the limit on the supply of goods in the economy. Due to quota, there is the difference between the price received by producer and given by consumer known as a wedge.

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