a case where price is set below equilibrium price
a legal maximum that can be charged for a good
a maximum legal price that can be charged for a product
A government-imposed maximum for the price of a particular good.
The highest price at which it is legal to trade a particular good, service, or factor of production. A rent ceiling is an example of a price ceiling. (p. 166)
A maximum price that is set so that the price of a resource, good, or service will not be permitted, die to the forces of supply and demand, to rise above the maximum. Rent control is an example of a price ceiling.
a government price control that sets the maximum allowable price for a good.
a maximum price above which market prices are not legally allowed to rise
a price below equilibrium legislated by the government which results in a shortage
A price ceiling is a regulation that makes it illegal to charge a price higher than a specified level. An "effective" price ceiling (below the equilibrium price) generally leads to a shortage, which is an unintended (but predictable) consequence.
A price ceiling is a government-imposed limit on how high a price can be charged on a product. For a price ceiling to be effective, it must differ from the free market price. In the graph at right, the supply and demand curves intersect to determine the free-market quantity and price.
