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Minimum Price and Maximum Price

Economics igcse chapter 15 explanation ppt

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77 views7 pages

Minimum Price and Maximum Price

Economics igcse chapter 15 explanation ppt

Uploaded by

riyansmehta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Minimum Price and

Maximum price.
An Overview of price control.
Made BY-Riyan Mehta
PRICE CONTROL

 What is price control- Price control is a a government regulation establishing a


maximum price to be charged for specified goods and services, especially
during periods of war or inflation.
 What is the purpose of implementing price control?
 Price controls in economics are restrictions imposed by governments to ensure
that goods and services remain affordable. They are also used to create a fair
market that is accessible by all. The point of price controls is to help curb
inflation and to create balance in the market.
Minimum Price

 What is minimum price - A minimum price, also known as a price floor, is a form
of government intervention that sets a legal minimum price for a specific good
or service
 ADVANTAGES OF SETTING A MINIMUM PRICE
 Price controls in economics are restrictions imposed by governments to ensure
that goods and services remain affordable. They are also used to create a fair
market that is accessible by all. The point of price controls is to help curb
inflation and to create balance in the market.
 DISADVANTAGES OF SETTING A MINIMUM PRICE
 minimum prices can also have unintended consequences, such as: Surplus
production: By setting prices above the equilibrium level, minimum prices can
lead to surplus production, as the quantity supplied exceeds the quantity
demanded. This can result in wasted resources or increased storage costs.
DIAGRAM

 GOOD EFFECT OF SETTING A MINIMUM PRICE

 BAD EFFECT OF SETTING A MINIMUM PRICE


MAXIMUM PRICE

 What is maximum price -A maximum price occurs when a government sets a


legal limit on the price of a good or service – with the aim of reducing prices
below the market equilibrium price.
 ADVANTAGES OF SETTING A MAXIMUM PRICE
 The advantage is that they will lead to lower prices for consumers. This may be
important if the supplier has monopoly power to exploit consumers. For
example, a landlord who owns all the property in an area can charge excessive
prices.
 DISADVANTAGES OF SETTING A MAXIMUM PRICE
 If firms get a lower price, there may be less incentive to supply the good, and
the number of properties on the market declines. A maximum price will also lead
to a shortage – where demand will exceed supply; this leads to waiting lists. In
housing it could lead to a rise in homelessness
DIAGRAM

 GOOD EFFECT OF SETTING A MAXIMUM PRICE-

 BAD EFFECT OF SETTING A MAXIMUM PRICE-

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