Thank you for the opportunity to help you with your question!
When: A price ceiling is a government-imposed to control prices
or limit on how high a price is charged for a product. Governments
intend price ceilings to protect consumers from conditions that could
make necessary commodities unattainable.
Purpose: A price ceiling occurs when the government puts a legal limit on how high the price of a product can be. This is done to make commodities affordable to the general public.
Recommendation: I will recommend it because it cushions those who are not able to acquire commodities because of low income.
Please let me know if you need any clarification. I'm always happy to answer your questions.
Let's takes take an example of the house-rent market. lets saya price of $5000 has been determined as the equilibrium price with the quantity at 20 homes. Now, the government determines a price ceiling of $2000. At this rate there is a shortage (demand for 20 houses, but supply is for only 10 houses).
Aug 13th, 2015
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