Short note on price ceiling
Dear student,
Price ceiling is a maximum price fixed by Government that a seller can charge from the consumers. Price ceiling is fixed below the equilibrium level to ensure that the essential commodities are affordable to general public. It enables poor people to afford essential commodities at a reasonable price. It creates a problem of shortage as it leads to a situation of excess demand. The situation of excess demand creates a problem of Black Marketing which worsen the situation of poor sections of the society as in situation of black marketing, the goods are sold at a price higher than that fixed by the government.
So, the government should ensure efficiency of ration shops and other channels of distribution along with fixing price ceiling to ensure welfare of poor sections of society.
Regards
Price ceiling is a maximum price fixed by Government that a seller can charge from the consumers. Price ceiling is fixed below the equilibrium level to ensure that the essential commodities are affordable to general public. It enables poor people to afford essential commodities at a reasonable price. It creates a problem of shortage as it leads to a situation of excess demand. The situation of excess demand creates a problem of Black Marketing which worsen the situation of poor sections of the society as in situation of black marketing, the goods are sold at a price higher than that fixed by the government.
So, the government should ensure efficiency of ration shops and other channels of distribution along with fixing price ceiling to ensure welfare of poor sections of society.
Regards