Question

Do you think there are some scenarios where a price ceiling or price floor could be a benefit?

Answer 1

The price ceiling refers to a maximum price which can be charged for an item or service. The main advantage of price ceiling is that the price can't rise above a specific level. It helps in reducing the prices below the market equilibrium price; and as a result causes lower prices for consumers. Examples of price ceiling include limitations of price on insurance premium. gasoline, rents, etc. in many countries. In the urban areas, such as Washington D.C., New York, or San Francisco when rents rapidly begin to rise the government imposes a price ceiling thus creating a benefit for the consumers as it ensure viable and affordable homes.

The price floor refers to a minimum price which can be charged for an item or service. For example when the government sets the minimum wage thus will benefit the consumers by ensuring an adequate amount of wages