A price ceiling is a costly and seldom used mechanism for:

Question

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A price ceiling is used to restrict the maximum price that can be charged for a product or service. It is used when there is excess demand for the product or service and the market price is too high for some buyers. By setting a lower price ceiling, the government aims to make the product more affordable for some consumers. This mechanism is costly because it often leads to shortages, quality deterioration, and a reduction in supply. It is also seldom used because there are alternative mechanisms such as taxation, subsidies, and regulation that can achieve similar results without the negative consequences of a price ceiling.

A Price Ceiling Is a Costly and Seldom Used Mechanism