Price Ceiling is one form through which government regulates price.
Discuss the concept of "Price Ceiling" with the help of diagram. What is the common purpose of fixation
of Price Ceiling by the government? Explain any one likely consequence of this nature of intervention by
the government.
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What Is a Price Ceiling?
A price ceiling is the mandated maximum amount a seller is allowed to charge for a product or service. Usually set by law, price ceilings are typically applied to staples such as food and energy products when such goods become unaffordable to regular consumers.
A price ceiling is essentially a type of price control. Price ceilings can be advantageous in allowing essentials to be affordable, at least temporarily. However, economists question how beneficial such ceilings are in the long run.
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