There are two types of price control in the market, the first one is price floors and the second one is price ceilings. Price floors are the minimum prices in goods and services. Sometimes the decision of price floors are set by the government or the producers. Government could impose price floors if the prices are too low for producers. The government acts when the price is too low because it might lead to an unfair market. In the fair market, prices should not fall below the minimum.
Price ceilings on the other hand are the highest points where goods and services are sellable and agreeable. On this occasion, the authorities aim at helping consumers if they note that the prices are both too far and too high. The most possible case following price ceilings are rent controls. Rent control is the form of government program that limits landlord demand in leasing or renewing a lease. The authorities expect to protect tenants from both slumlords and overzealous landlords. Theoretically, price ceilings could not go too much above just like price floors.
There are many common examples of price controls. The authorities set limits on the amount of rent a property owner could get from the tenants. The limits sometimes are applicable on annual rent increases. In the housing sector, the authorities set price control so that it could make housing prices affordable. Therefore, elderly people and people with low incomes could still keep the housing affordable.
Other examples of price controls happen in many sectors like research and development to minimum wages. Sectors like medications often receive government intervention in price controls.
