Price Floors and Ceilings Homework Answers

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Price Floors and Ceilings Assignment Answers

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There are at times when the National and the Local governments implement a price control on certain products. This is either the minimum or the maximum price set for the goods or services. There are two types of price controls-one is the price ceiling and the other is the price floor.

Price ceiling is the maximum and price floor is the minimum price set for certain products. Though both price ceiling and price floor can be decided at the same time yet the government either sets the price ceiling or the price floor.

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When does government impose price control?

When price is set for a particular product or service then there is a balance between demand and supply. If price is controlled by government then there will either be an excess of demands or an excess of supplies.

This is because legal price is different from the market price. In fact price control is normally imposed if government is not happy with the market price. If you have to do a task on this topic then it is essential for you to take price floors and ceilings assignment answers from a prominent agency like

Effects of price controls

When there is a price control imposed by the government, the producers of goods are not able to foresee trouble. It is for this reason that they manufacture a huge quantity of goods. But consumers do not buy so many goods at a higher price and so all those goods remain unsold.

If suppliers are not able to understand beforehand that demand for a particular product will decrease then there will be a lot of economic harm caused. The consumers at this point of time will have to bear a loss. This is because there will be some manufacturers who will suffer a huge loss and close down their business and other manufacturers will take advantage of an increased demand and therefore earn good revenue.

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