Price Controls

Price controls are laws that set prices. A price ceiling sets a maximum allowable price, and a price floor sets a minimum allowable price. When a price control prevents the market equilibrium price from being reached, the total surplus (i.e., the consumer plus the producer surplus) is reduced. This reduction is known as the deadweight loss and is represented above by the purple triangle.


  • [Snapshot]
  • [Snapshot]
  • [Snapshot]
    • Share:

Embed Interactive Demonstration New!

Just copy and paste this snippet of JavaScript code into your website or blog to put the live Demonstration on your site. More details »

Files require Wolfram CDF Player or Mathematica.