Price Ceiling Vs Price Floor Differences | Micro Economics | Effect of Price Ceiling on Equilibrium

Añadido: 2026-06-03

[00:00:00]Let's understand the differences between price ceiling and price floor. Price ceiling is the maximum or upper price limit set by the government, while price floor is the minimum or lower price limit set by the government. Objective of price ceiling is to protect consumers, whereas price floor is introduced to protect producers or workers.

[00:00:23]Price ceiling is fixed below the equilibrium price, while in price floor, price is fixed above the equilibrium price.

[00:00:33]Price ceiling creates the situation of excess demand or shortage, whereas price floor creates excess supply or surplus.

[00:00:45]Examples of price ceiling include rent control and prices of essential goods and medicines, whereas examples of price floor include minimum support price and minimum wages.

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