What is an example of a price ceiling?

A price ceiling is a government-imposed limit on the price charged for a product or service, designed to keep it affordable for consumers. Rent control is a prime example of this concept. It establishes a maximum rental price that landlords can charge tenants, thereby preventing rents from rising excessively during times of high demand, such as in urban areas where housing is scarce. By doing so, it aims to make housing more accessible and affordable for individuals and families.

In contrast, minimum wage laws focus on establishing a minimum amount that employers can pay workers, which does not function in the same manner as a price ceiling. Subsidies for housing are financial aids intended to reduce the cost of housing indirectly, rather than placing a cap on prices directly. Import tariffs are taxes imposed on imported goods to increase their prices, aimed at protecting domestic industries, which is also different from the pricing limits set by a ceiling.