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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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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. ...

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price ceiling