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?© BrainMass Inc. brainmass.com June 4, 2020, 12:35 am ad1c9bdddf
price floor occurs when the government imposes a limit as to how low the price of a good/service may be charged (i.e. sets a minimum price). A price ceiling is the opposite (ie a max. price).
Examples of price floor may include wheat price (to protect farmers), minimum wage.
exmples of price ceiling may include rent control (i.e. ...