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A price ceiling keeps a price from rising above a certain level the ceiling while a price floor keeps a price from falling below a certain level the floor.
Floor and ceiling economics. A price ceiling is essentially a type of price control price ceilings can be advantageous in allowing essentials to be affordable at least temporarily. Price ceiling has been found to be of great importance in the house rent market. A price ceiling can increase the economic surplus of consumers as it decreases economic surpluses for the producer. It has been found that higher price ceilings are ineffective.
However economists question how beneficial. The next section discusses price floors. This section uses the demand and supply framework to analyze price ceilings. Price floors and price ceilings are government imposed minimums and maximums on the price of certain goods or services.
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