Note also that the quantity produced will equal the quantity consumed. Price floors involve a minimum price that can be charged. To be effective, they must be set above the market equilibrium price. Note, that with an effective price floor, the price paid by consumers equals the price received by producers. However, the quantity produced will differ from the quantity consumed.
Price ceilings involve a maximum price that can be charged.
To be effective, they must be set below the market equilibrium price. Note, that with an effective price ceiling, the price paid by consumers equals the price received by producers. However, the quantity produced will differ from the quantity consumed. The broadest measure of production is Gross Domestic Product. The distinction between GNP and GDP has to do with ownership of the factors that produced the output.