PRICE CEILING: A legally established maximum price. The government is occasionally inclined to keep the price of one good or another from rising too high. Examples include apartments, gasoline, and natural gas. While the goal is invariably a noble one--like keeping stuff affordable for poor people--a price ceiling often does more harm than good. First, it usually creates a shortage, meaning that many of the buyers who being protected against high prices, can't even buy the good. Second, as a consequence of this shortage, a price ceiling is likely to generate a black market where the good is sold illegally above the price ceiling.

     See also | market | price | regulation | shortage | black market | price floor |

PRICE CEILING, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2014. [Accessed: March 7, 2014].

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Another term for the long-run average cost curve. The long-run average cost curve is termed the planning horizon or planning curve because it provides information that a firm can use to plan factory construction and expansion in the long run.

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