Question

Pick up at least three real life examples from Pakistani markets, where Government had given price ceilings and price floors in order to facilitate consumers and producers for unfair prices. Conclude your report by providing effectiveness of these price controls.​

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Answer 1

Laws that government enacts to regulate prices are called Price controls. Price controls come in two flavors. A price ceiling keeps a price from rising above a certain level (the “ceiling”), while a price floor keeps a price from falling below a certain level (the “floor”). This section uses the demand and supply framework to analyze price ceilings. The next section discusses price floors.