'Price ceilling Essay\r'

' on that point are different ways the government in a developing country wants to protect consumers from conditions that could urinate necessary merchandises out-of-the-way. One of the things is impairment capital, which a government- strained jump on the damage aerated for a product. impairment ceiling is a situation when the price charged is more than or less than the equilibrium price determined by foodstuff forces of demand and tote up. Though, a price ceiling usher out cause problems if forced for a great period without controlled limits. Misuse occurs when a government accidentally priced a price as too high when the real problem is that the supply is too low. Price ceilings can produce ostracize results when the correct solution would have been to increase supply. It can introduce a black market, it can creates a persistent shortage, decreases in investment, or price on the black market ends up higher than the equilibrium price.\r\nFor example, if the government s et a price ceiling on bread in order to happen upon this basic food more affordable. And other attitude assuming that each hour that people calculate in lines represents a mazed hour of wrench. downstairs many circumstances the ceiling lead to long lines and thus high costs in lost work hours. A price ceiling that is below market equilibrium allow for be a binding price ceiling and that could cause a shortage due to increasing demand because of the let down price of the product. And it could create a black market where people can buy it for double the price for the bread. On the other hand, if there is an hour that an soul must wait in line, there is a lost hour of work for the supplier. Due to the supplier losing an hour of work it will cut into the moolah of that firm making their total revenue. The supplier will already loose the benefit of selling to a certain buyer within that hour period. even if the firm hired more workers to create a shorter wait in the line the y may be able to make the most out of it. So if the supplier reduces the time lost in work they can reach the point of profit maximization.\r\n'