3.4 Price Ceilings and Price Floors

Last updated over 2 years ago

2 questions

Categorize (by dragging) the below as either a price floor or ceiling.

India’s government recently enacted legislation that allows major cities to arbitrarily set limits how much ride service companies such as Uber can charge riders during peak times.
Rent control (Capping the price that landlords can charge.)
Wartime pricing that occurred during World War II. Over this period of time, the government set the price of many consumer goods (for example, products made of paper, lumber, or rubber) to below natural market price in an effort to control inflation and prevent prices from rising too quickly when there was a low supply and excess demand.
NBA Salary Cap (NBA teams cannot go over a certain amount of player salaries or they will incur a huge tax.)
Bottled water can only be $1 during Hurricane emergencies.
Cigarette taxes
A carbon price — the method widely agreed to be the most efficient way for nations to reduce global warmingemissions — is a cost applied to carbon pollution to encourage polluters to reduce the amount of greenhouse gases they emit into the atmosphere.
Minimum Wage
The federal government has stated that a liter of soy bean cannot be sold for less than $1. (Note: equilibrium price is $0.50)
The government sets the maximum price for some drugs.
In some cases, the government subsidizes the price or pays farms directly. This measure aims to ensure that farmers make enough money to keep their farms open, even if there is an excess supply of milk, which, under a competitive market, would lower the price of a gallon of milk.