88CHAPTERDYNAMIC POWERPOINT™ SLIDES BY SOLINA LINDAHLPrice Ceilings and FloorsPrice Ceilings and FloorsCHAPTER OUTLINEPrice CeilingsRent Control (Optional Section)Arguments for Price ControlsUniversal Price ControlsPrice FloorsFor applications, click hereTo Try it! To Try it! questionsquestionsTo To VideoVideoSome good blogs and other sites to get the juices flowing:Food for ThoughtFood for Thought….SEE THE SEE THE INVISIBLEINVISIBLEHANDHANDSEE THE SEE THE INVISIBLEINVISIBLEHANDHANDIraq 2003: Gas prices are frozen at $.05 per gallon. A good idea?SEE THE SEE THE INVISIBLEINVISIBLEHANDHANDSEE THE SEE THE INVISIBLEINVISIBLEHANDHANDGetting in the way of the invisible hand? Distorted price signals cause resources to be misallocated.BACK TO Price CeilingsPolicy makers may respond to buyers’complaints that prices are “too high”by enacting price controls.A Price Ceiling A Price Ceiling is a maximum price allowed by law.Price ceilings limit the price sellers can charge for their goods to the maximum price.Prices cannot legally go higher than the ceiling.