Real life example of price ceiling
Other than prices of chickens, cooking oil, flour being controlled during festivals,
cement price in Malaysia, too , has a price ceiling , it is at RM198 per tonne.
The article mentioned
Cement, a controlled item, has an average government ceiling price of RM198 per tonne, which is deemed the normal level.
The price of the commodity is expected to average RM185 per tonne, which is 19% higher than last year's average of RM155 a tonne.
Analysts expect prices to rise further to RM192 and RM198 a tonne in 2007 and 2008 respectively, on better demand-supply balance. (greater demand in the market?, shift of demand curve to the right?)
Link to article
http://biz.thestar.com.my/news/story.asp?file=/2006/4/24/business/14005604&sec=business
Think: Why is demand cement important? In which industry it is relevant to?
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