the.com/price ceiling
A law that makes shortages feel like fairness and scarcity feel like virtue.
means A government-imposed maximum price that sellers are legally allowed to charge for a good or service, usually set below the market price to help buyers afford it.
from The 'ceiling' metaphor is a straightforward architectural borrowing from economics — a price simply cannot rise above this fixed point, the way a room's ceiling caps how high anything inside it can go. The term entered common economic usage in the 20th century, notably during wartime price controls, when governments capped the cost of essentials like rent and food to prevent inflation and profiteering during shortages. The economic logic — and the enduring controversy — is that a ceiling set below the natural market price tends to suppress supply even as it boosts demand, producing exactly the shortages it was meant to prevent.
- definition
- legal max price, set below market equilibrium
- side effect
- creates shortages, lines, and black markets
- classic case
- rent control shrinks housing supply over time
- economist joke
- the only tool that creates the problem it fights