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definition: Although markets tend to naturally move towards equilibrium, sometimes the government intervenes to control prices
- Price ceilings are a maximum price set by the government that can be legally charged for a good or service - The price ceiling is set below the market equilibrium price - This creates a shortage connected key terms: price floor | minimum wage | rent control
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▪ maximum on gasoline ▪ stopping people from selling paper towels for 10.00 a roll during a pandemic |