Definition: Given a passage and a query based on the passage, generate an unambiguous, concise and simple answer to the query from information in the passage. Note that the answer may not be present in exact form.
Input: (The authors did not find any difference in costs which could explain the result.) Another example is Sen et al. who found that gasoline prices were higher in states that instituted price ceilings. Another example is the Supreme Court of Pakistan decision regarding fixing a ceiling price for sugar at PKR45/kg. Price Ceilings. A price ceiling is the opposite of a price floor: It's a government-mandated maximum price for a good or service. As economists Paul Krugman and Robin Wells note in their basic text Microeconomics, price ceilings are far less common than price floors in the modern U.S. economy. Still, there are some. Rent-control law in New York and other major cities is an example of price ceilings. Price Floors When a price floor is set, a certain minimum amount must be paid for a good or service. If the price floor is below a market price, no direct effect occurs. If the market price is lower than the price floor, then a surplus will be generated. Minimum wage laws are good examples of price floors. In many states, the U.S. minimum wage law has no effect, as market wage rates for low-skilled workers are above the U.S. minimum wage rate. Difference Between Price Ceilings and Price Floor Both price ceilings and floors are forms of price controls. While a price ceiling dictates the maximum price of a good or service, a price floor refers to the lowest price for which a good or service may be sold. If the price ceiling is set below the market price, then a shortage is created; the quantity demanded will exceed the quantity supplied. The shortage may be resolved in many ways. One way is queuing; people have to wait in line for the product, and only those willing to wait in line for the product will actually get it. Key points. Price ceilings prevent a price from rising above a certain level. When a price ceiling is set below the equilibrium price, quantity demanded will exceed quantity supplied, and excess demand or shortages will result. Price floors prevent a price from falling below a certain level. A price ceiling is a government-imposed price control, or limit, on how high a price is charged for a product. Governments use price ceilings to protect consumers from conditions that could make commodities prohibitively expensive. Such conditions can occur during periods of high inflation, in the event of an investment bubble, or in the event of monopoly ownership of a product, all of which can cause problems if imposed for a long period without controlled rationing, leading to shortages. Furth Price ceiling is a measure of price control imposed by the government on particular commodities in order to prevent consumers from being charged high prices. Price ceiling can also be understood as a legal maximum price set by the government on particular goods and services to make those commodities attainable to all consumers. Answers to Self-Check Questions. 1 A price ceiling (which is below the equilibrium price) will cause the quantity demanded to rise and the quantity supplied to fall. This is why a price ceiling creates a shortage. 2 A price ceiling is just a legal restriction. Equilibrium is an economic condition. A price floor is a government- or group-imposed price control or limit on how low a price can be charged for a product.[1] A price floor must be higher than the equilibrium price in order to be effective. Query: how is a price floor different than a price ceiling?
Output:
Difference Between Price Ceilings and Price Floor Both price ceilings and floors are forms of price controls.