Price Control:
Price Control refers to the legal minimum and maximum prices set for specified goods and services. It is normally monitored by the government in the free market. They are usually implemented as a means of direct economic intervention to manage the affordability of certain goods and services.
Types of Price Control:
- Price Floor –
It is the minimum price set for the goods and services. They may be set by the government or in some cases, by the producers themselves. Minimum prices are imposed to help consumers, when the authorities believe that prices are too low leading to an unfair trade market. Hence, set prices can’t fall below the minimum price.
- Price Ceiling –
It is the highest point at which goods and services can be sold. This occur when authorities want to help the consumers, if they fell that prices are far too high.
