Price Control
Government regulation of prices; setting maximum or minimum prices.
Real World
During the 2022 energy crisis, the UK government capped household energy prices at £2,500 per year — without this ceiling, suppliers could have charged far more, but it also reduced their incentive to invest in new supply.
Exam Focus
Specify whether the question involves a price ceiling or floor before evaluating effects — common mistake is confusing which causes shortages versus surpluses.
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