Difference between revisions of "Price ceiling"
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[[Image:Price_Ceiling.gif|right|]] | [[Image:Price_Ceiling.gif|right|]] | ||
| − | A price ceiling, also known as a price control, a government regulation prohibiting the sale of a good or service above a fixed price. Rent control on older dwellings in large cities, such as New York City, is an example of a price ceiling. Price controls during World War II are also examples of price ceilings. | + | A price ceiling, also known as a price control, a government regulation prohibiting the sale of a good or service above a fixed price. Rent control on older dwellings in large cities, such as New York City, is an example of a price ceiling. Price controls during World War II are also examples of price ceilings. To be effective the price ceiling has to be below the equilibrium, as shown in the picture on the right. Price ceiling have no effect on the price if it is above the equilibrium. |
[[category:economics]] | [[category:economics]] | ||
Revision as of 03:38, May 15, 2007
A price ceiling, also known as a price control, a government regulation prohibiting the sale of a good or service above a fixed price. Rent control on older dwellings in large cities, such as New York City, is an example of a price ceiling. Price controls during World War II are also examples of price ceilings. To be effective the price ceiling has to be below the equilibrium, as shown in the picture on the right. Price ceiling have no effect on the price if it is above the equilibrium.