What is price ceiling? Explain its …

price ceiling refers to fixing the maximum price of a commodity at a level of lower than equilibrium price ..government imposed price ceiling in case of essential commodities ( sugar ,kerosene , wheat and excetra)the equilibrium price determined by free market force of demand and supply is high.. the implication of price ceiling is 1.storage or excess demand: at the this control price of quantity demand is more than quantity supplied it creates the shortage and overcome this shortage governament main in force the rationing system. 2. black marketing :if rationing is not administrated by the government effectively IT results in black marketing due to Excess demand buyers will complete and they would be willing to buy a commodity at Higher price than the fixed price by the government.

The maximum price which is fixed by the government is known as the price ceiling Italy above the equilibrium price and it ensure the availability for necessary goods to the weaker section of the society it creates excess demand in the market and cause buffer stock

When a government fixed price more then equilibrium point of market . the government impose price ceiling mainly nessary goods and services.