Price Floors, Price Ceilings and Taxes

A government-enforced minimum price for a consumer good. It is the lowest legal price that can be paid in a market for goods and services, labor, or financial capital. It exists when the price is artificially held above the equilibrium price and is not allowed to fall.

A government-enforced maximum price for a consumer good. Occurs when the price is artificially held below the equilibrium price and is not allowed to rise.

A compulsory contribution imposed by the state upon individuals or properties within its jurisdiction to meet the government’s financial obligations.

Types of Taxes: