Price Floor Vs Price Ceiling. But this is a control or limit on how low a price can be charged for any commodity. This analysis shows that a price ceiling like a law establishing rent controls will transfer some producer surplus to consumerswhich helps to explain why consumers often favor them.
A point to note is that a government may set both price floor and ceiling for a product. What mechanisms allocate resources when the price of a good is not allowed to. Although both a price ceiling and a price floor can be imposed the government usually only selects either a ceiling or a floor for particular goods or services.
It is usually determined by the government but public entities such as the NFL have been known to organize a private price floor.
But this is a control or limit on how low a price can be charged for any commodity. The primary objective is to protect the buyers and sellers from adverse price movements. Price Ceiling vs Price Floor A price floor is where a minimum price is set for a good or service. New video for this topic.
