ECONOMICS
MARKETS AND PRICES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Cheap ones that could become more expensive without ceilings
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Ones that aren’t necessary but have become customary
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Those that are essential and cheap
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Those that are essential but too expensive for some people
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Detailed explanation-1: -A price ceiling is a type of price control, usually government-mandated, that sets the maximum amount a seller can charge for a good or service. Price ceilings are typically imposed on consumer staples, like food, gas, or medicine, often after a crisis or particular event sends costs skyrocketing.
Detailed explanation-2: -The government generally places price ceilings on essential or basic products which are too expensive for consumers. The essential goods include food, houses or shelter and others that consumers cannot live without partaking.
Detailed explanation-3: -Practical Example of a Price Ceiling In equilibrium, the price of rent is $1, 000 with a quantity of 100. Due to the extremely high demand for rental housing, the government decided to regulate the situation by imposing a price ceiling of $900.
Detailed explanation-4: -Description: Government imposes a price ceiling to control the maximum prices that can be charged by suppliers for the commodity. This is done to make commodities affordable to the general public. However, prolonged application of a price ceiling can lead to black marketing and unrest in the supply side.
Detailed explanation-5: -The government-imposed lower limit on the price that may be charged for a particular good or service is called price floor. For certain goods and services, fall in price below a particular level is not desirable and hence the government sets floors or minimum prices for these goods and services.