Price Ceilings & Price Floors

Notes by Rafael

“Price ceiling is a measure to ensure economic security and equity by setting a highest legal price for a product.” For example for needs like water, electricity, there needs to be a top price so everyone can afford the product and the resources are allocated better.
Pg 157

“Price floor is another measure to ensure economic security and equity by setting a lowest legal price for a product or service.” For example the minimum wage paid to workers. Pg 158

“Laissez-faire is a French term that means “allow them to do” which implies that there is an economic freedom to act and the government’s authority in this liberty is not that strict.” Pg 169