Question: Does a price ceiling attempt to make a price higher or lower? Explain

Anser: A price ceiling is a price control mechanism to keep a price lower for a good. The book gives an example, "During hurricane Katrina, water cost $5 a gallon. Many called for price ceilings to keep it from rising higher, but the government did not intervene but other times price ceilings did intervene." The government enacts them to level the market and keep consumers and suppliers in balance with each other. A cost floor keeps the price of a good from plummeting below a certain point, usually to keep a good's supplier in business. Like certain crops in certain states have a surplus of food during certain times, price floors keep the farms from getting pennies for their labor.

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