Floor Ceiling In Economics

The next section discusses price floors.

Floor ceiling in economics.

Price floors and price ceilings are government imposed minimums and maximums on the price of certain goods or services. 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. Price ceiling has been found to be of great importance in the house rent market.

Government imposes a price ceiling to control the maximum prices that can be charged by suppliers for the commodity. While they make staples affordable for consumers in. 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. As a form of restriction a floor provides a limit for a particular activity or transaction to which it must adhere.