What are price controls? What is the effect of price controls on the market and market equilibrium.© BrainMass Inc. brainmass.com October 10, 2019, 5:19 am ad1c9bdddf
There are usually two types of price controls: the price ceiling and the price floor.
The price floor is a regulation that sets a limit on how low prices of a certain good/service can be. The price ceiling, on the other hand, is the limit of how high prices can be.
An example of price floor is minimum wage (i.e. the ...
This solution defines price controls and discusses the effect of price controls on the market and market equilibrium.