Price Ceiling

A price ceiling is a government-imposed limit on how high a price can be charged for a product or service. It’s intended to make essential items, like rent or medicine, more affordable for consumers. For example, if a city sets a price ceiling on rent, landlords cannot charge more than that limit. While this helps consumers, it can also lead to shortages if the capped price is too low, because suppliers might not find it profitable to provide enough of the product. Overall, price ceilings aim to protect buyers but can have unintended market consequences.