Highlight any five objectives of price control.
Question 1 Report
Highlight any five objectives of price control.
Answer Details
Price control is government regulation of the price of goods and services, usually by fixing a maximum (ceiling) or minimum (floor) price. Its objectives include:
- To prevent exploitation of consumers: a maximum price stops sellers from charging excessively high prices for essential goods.
- To check inflation: holding prices down helps to control a general rise in the price level.
- To protect low-income earners: it keeps essential goods within the reach of the poor.
- To ensure fair distribution of goods: controlled prices, often with rationing, spread scarce goods more evenly.
- To stabilise prices: a minimum price protects producers (for example farmers) from ruinously low prices and steadies their incomes.
(Other valid objectives: to discourage hoarding and profiteering, and to reduce the general cost of living.)
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