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Economics : Price Ceiling


Running head: PRICE CEILING/ FLOORS1Price FloorStudents
NameInstitution AffiliationDatePRICE CEILING/ FLOORS2Waste results
from government’s price floorPrice floors are prices imposed by the
government, controlling how low a particularcommodity can be sold.
For the price floors to work effectively, they must be higher than
themarket price. The market price is the price at which the market
forces meet at an equilibrium.The market forces are factors like
supply and demand and external influences. The governmentuses the
price floor as a measure to ensure that commodities are not sold
below that price. Butthe price floor is not always effective. Some
wastes result from the price floor.In a scenario where a particular
commodity is sold below the original price market due tothe price
floors imposed by the government, black markets develop as a
result. Small enterprise …

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