price ceiling


Price Ceiling

The highest price for a good or service permitted by a government. A government may impose a price ceiling to protect consumers or to combat inflation. Many economists believe setting price ceilings is economically inefficient and a better response is to find a way to increase the supply of a good or service in order to bring down prices.

price ceiling

the maximum PRICE that can be charged for a PRODUCT, as determined by the government. Contrast PRICE FLOOR.

See PRICE CONTROLS, PRICES AND INCOMES POLICY.