ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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.

Detailed explanation-2: -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-3: -Price ceiling are used by the government to Prevent prices from being too high. The main reason for imposing price ceilings is to protect the interests of the consumers in situations in which they are not able to afford needed commodities.

Detailed explanation-4: -Governments usually set up a price floor in order to ensure that the market price of a commodity does not fall below a level that would threaten the financial existence of producers of the commodity.

Detailed explanation-5: -Price ceiling refers to the mechanism by which the price for a good is prevented from rising to a certain level. In contrast to that, price floor is the mechanism by which the price of a good is prevented from falling below a certain level.