Question

4. Find one example of price ceiling and one example of price floor in your own country and in explain how these policies change the market efficiency?

Answer 1

One example of price ceiling is the price on certain medicines where the government fix the price below the equilibrium price so that it wouldn't be exploited and as a result of which the efficiency is affected where the quantity demanded is more than that of quantity supplied as a result of which there is a shortage

one example of price floor is the minimum wage laws where the government fixed a minimum wage and this is even created a market inefficiency where the quantity supplied of labour is more than that of quantity demanded as a result of which there is a surplus of labour