Price Ceiling

Price Ceiling Assignment Help

Price Ceiling

Maximum price legislation imposes a price ceiling above which a good cannot be legally sold. Maximum price controls, over a time, lead to reduction in supply because suppliers have no incentive to produce and sell at this legally maximum controlled price, which is lower than the price determined by the free play of market force. Since available supply will not be enough to satisfy needs of all the customers, there are bound to be shortages and long queues in the market some people will, thus get the goods while the other will go back unsatisfied.


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