Price ceilings and price floors are economic policies that set maximum and minimum prices for certain goods and services. Price ceilings are set to protect consumers from high prices, while price floors are set to protect producers from low prices. Price ceilings and price floors can be used to regulate prices in markets, to
A price ceiling or price cap is a government- or group-imposed price control, or limit, on how high a price is charged for a product, commodity, or service. Governments impose price ceilings to protect consumers from conditions that could make commodities prohibitively expensive. Economists generally agree that consumer price controls do not accomplish what they intend to in market economies, and many economists instead recommend such controls should be avoided.