Whenever you have a problem with a price floor or a price ceiling, do not assume that it will always be effective. This solution will address how to determine if a price floor or ceiling is effective or not, what it looks like, it's purpose, and how to determine whether you need to use a price floor or a price ceiling in a given situation.© BrainMass Inc. brainmass.com October 9, 2019, 5:12 pm ad1c9bdddf
Whenever I have a problem with a price floor or ceiling, I always think of a drawing my Microeconomic Theory professor showed us. (See file attached "adamsmith"). The drawing shows four graphs, two with a price floor and two with a price ceiling. For both the floor and ceiling, in either case, one was drawn ...
Determine whether you need to use a price floor or a price ceiling in a given situation.