Price control can be defined as the fixing by Government of maximum or minimum price of
Answer Details
Price control refers to a government policy that sets a maximum or minimum price for certain goods or services in order to regulate the market. The government may choose to set price controls on goods that are considered essential or have a significant impact on the economy or society. This can include goods consumed by low-income earners, certain selected goods, and sometimes even luxury goods.
Price controls on goods consumed by low-income earners are intended to make essential goods more affordable and accessible to the most vulnerable members of society. On the other hand, price controls on luxury goods may be used to discourage excessive consumption and reduce income inequality.
Price controls can also be set on certain imported capital goods in order to protect domestic industries or to encourage the growth of domestic manufacturing. However, price controls on imported goods can also lead to reduced competition and potentially harm domestic consumers in the long term.
Overall, price controls are a tool that governments can use to manage the economy and promote social welfare, but they can also have unintended consequences and drawbacks.