What is the difference between price floor and price ceiling?

Business & Finance
Tutor: None Selected Time limit: 1 Day

and

According to the laws of supply and demand and how market equilibrium, efficiency and equity are reached, do attempts to repeal these laws and market results with price floors and ceilings justify legislative bodies to implement price controls?

Jul 14th, 2014

A price floor is a mandated minimum price for which a specified good or service can be sold.

A price ceiling is a mandated maximum price for which a specified good or service can be sold.

Both price floors and price ceilings inject inefficiencies into markets.  That is, both of these things lead to "dead weight loss" in the market (i.e., consumer or producer surplus that otherwise would have been realized that is lost due to government interference).  Consequently, it is apparent that laws which implement floors and ceilings should be repealed.

Jul 14th, 2014

Did you know? You can earn $20 for every friend you invite to Studypool!
Click here to
Refer a Friend
...
Jul 14th, 2014
...
Jul 14th, 2014
Dec 5th, 2016
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer