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    Explain difference between a price floor and a price ceiling

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    Explain the difference between a price floor and a price ceiling. Provide a situation in which a price ceiling may be used.

    What are the effects of this price control on the equilibrium price and quantity?

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    https://brainmass.com/business/business-management/price-floor-vs-price-ceiling-378596

    Solution Preview

    A price floor means that you cannot charge less than the price floor. This doesn't constrain the upper price at all. So, the price can vary as long as it stays above the floor.

    A price ceiling means that you cannot charge more than the ceiling price. So, the price can go as low as the market likes but it can not rise above this level.

    In some markets, the floor and ceiling never really impact the market (called ...

    Solution Summary

    This solution discusses the differences between a price floor and a price ceiling.

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