0% found this document useful (0 votes)
93 views3 pages

Economics: Price Control Policy

The document outlines the second term scheme of work for SS2, covering topics such as price control legislation, rationing, production possibility curves, and market structures. It defines price control as a government process to fix prices of essential commodities and discusses its objectives, types (maximum and minimum price control), and effects. The effects include potential hoarding, shortages, black market sales, and increased corruption.

Uploaded by

irokodaniel243
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
93 views3 pages

Economics: Price Control Policy

The document outlines the second term scheme of work for SS2, covering topics such as price control legislation, rationing, production possibility curves, and market structures. It defines price control as a government process to fix prices of essential commodities and discusses its objectives, types (maximum and minimum price control), and effects. The effects include potential hoarding, shortages, black market sales, and increased corruption.

Uploaded by

irokodaniel243
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

SS2 SCHEME OF WORK SECOND TERM

WEEK TOPICS
1 **PRICE CONTROL
LEGISLATION /POLICY
2 **RATION AND HOARDING
3 PRODUCTION POSSIBILITY
CURVE
4 COST CONCEPT
5 REVENUE CONCEPT
6 ECONOMIC SYSTEMS
7 MID TERM
8 LABOUR MARKET
9 SUPPLY AND DEMAND FOR
LABOUR
10 MARKET STRUCTURE
11 INDUSTRIES IN NIGERIA
12 LOCATION OF INDUSTRY
REVISION AND EXAMINATION

PRICE CONTROL POLICY /LEGISLATION

Price control is defined as a process government or its agency fixes the prices of
essential commodities . The government uses the instrument of the law to fix the
prices of the certain commodities through the office of the price control board

OBJECTIVES OF PRICE CONTROL


1. To prevent consumers exploitation by the producers
2. To avoid or control inflation
3. To help low income earners e.g. minimum wages
4. To control the profits of companies especial monopolists
5. To prevent price fluctuation of some commodities e.g. agriculture products
6. To stabilizes of the income of some producers
7. To make planning for the future output

TYPES OF PRICE CONTROL

Price control is divided into two, the maximum price control and minimum price
control.

1. Maximum price control: This is when the price of goods is fixed below the
equilibrium market price. It is the highest price by law that goods and
service can be sold, seller can sell below the price but cannot above it. The
aim of maximum price is to protect consumers and the low income
earners from exploitation of the producers, especially during rising
price(inflation).However ,the price being fixed below price equilibrium
could leads to demand of goods and services to be greater than supply.
The effect of this could be the introduction of black market. The graph
below explains maximum price control. Maximum price control is also
known as price ceiling, on the other hand, is a maximum price set for
a good or service, meaning that the market price cannot exceed this
level
2.Minimum price control :This is when prices of specified goods and services are
fixed above the equilibrium price .It is the lowest price fixed by law that the
specified goods and services can be sold or bought ,it can be above but cannot go
below it . The aim is to protect producers (especially agricultural producers) from
fluctuation of brought about bad harvest or weather . Minimum price control is
known as price floor (is a minimum price that is set for a good or service,
meaning that the market price cannot go below the level).

EFFECTS OF PRICE CONTROL POLICY

1. It may leading hoarding(creating artificial scarcity) of goods


2. It may lead to Stimulation of demand ,that’s excess demand that cannot be
satisfied
3. Shortage of goods in the market, leading to queue and racketeering
4. It creates long queues for certain goods
5. It leads to black market sales or under counter sales
6. It leads to rationing of certain goods
7. It brings about bribery ,favouritism and corruption

You might also like