CEILING PRICE Meaning and
Definition
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A ceiling price refers to the maximum price or upper limit that can be charged for a particular product or service. It is a legal or regulatory measure implemented by the government or an authoritative body with the intention of preventing excessive price increases, ensuring consumer protection, and maintaining affordability in the market. The ceiling price acts as a price control mechanism that establishes a boundary beyond which sellers cannot sell their goods or services.
The implementation of a ceiling price can be temporary, usually during times of crisis, such as in times of inflation or shortages. It aims to prevent price gouging and exploitation of consumers. The ceiling price is often set based on market conditions, production costs, and government regulations. It may also take into account factors such as supply and demand dynamics, competition levels, and the welfare of consumers.
By establishing a ceiling price, authorities attempt to strike a balance between protecting consumers from exorbitant prices and ensuring that sellers can still cover their costs and operate sustainably. However, it can also lead to unintended consequences such as shortages, reduced quality, and a lack of investment in the affected sectors. Ceiling prices are often controversial, as opinions on their effectiveness and potential drawbacks vary among economists, policymakers, and market participants.
Common Misspellings for CEILING PRICE
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- ceilung price
Etymology of CEILING PRICE
The word "ceiling price" comes from the combination of the word "ceiling" and "price".
The term "ceiling" traces back to the Middle English word "selyng", which originally referred to the interior upper surface of a room or the topmost point of a structure. It eventually evolved to include the sense of an upper limit or boundary.
The word "price" itself has its roots in Old French and Latin, derived from "pretium", meaning "value" or "reward".
Therefore, "ceiling price" is a modern compound term that combines the concept of an upper limit or boundary (ceiling) with the value or cost of a product or service (price), indicating the maximum or highest allowable price for a particular item.
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