Price controls are governmental restrictions on the prices that can be charged for goods and services in a market. The intent behind implementing such controls can stem from the desire to maintain affordability of staple foods and goods, to prevent price gouging during shortages, and to slow inflation, or, alternatively, to insure a minimum income for providers of certain goods. There are two primary forms of price control, a price ceiling, the maximum price that can be charged, and a price floor, the minimum price that can be charged.
Historically, price controls have often been imposed as part of a larger incomes policy package also employing wage controls and other regulatory elements.
Although price controls are often used by governments, economists usually agree that price controls don't accomplish what they are intended to do and are generally to be avoided.
Read more about Price Controls: Historical Examples, Criticisms
Famous quotes containing the words price and/or controls:
“They give us a pair of cloth shorts twice a year for all our clothing. When we work in the sugar mills and catch our finger in the millstone, they cut off our hand; when we try to run away, they cut off our leg: both things have happened to me. It is at this price that you eat sugar in Europe.”
—Voltaire [François Marie Arouet] (1694–1778)
“Who controls the past controls the future: who controls the present controls the past.”
—George Orwell (1903–1950)