Overview
Price controls are essential tools used by governments to regulate the economy, particularly in times of crisis. They can take the form of price ceilings, which limit how high prices can go, and price floors, which set a minimum price. While these controls aim to protect consumers and ensure fair ac...
Key Terms
Example: Rent control laws limit how much landlords can charge for apartments.
Example: Minimum wage laws establish the lowest hourly wage that can be paid to workers.
Example: When the price of apples is $1, and consumers buy all available apples.
Example: A shortage of housing occurs when rent is capped too low.
Example: A surplus of labor occurs when minimum wage is set above the market rate.
Example: High demand for smartphones increases their prices.