The freely functioning markets that we have developed certainly do not describe all markets. For example, minimum wages characterize the labour market, most agricultural markets have supply restrictions, apartments are subject to rent controls, and blood is not a freely traded market commodity in Canada. In short, price controls and quotas characterize many markets. Price controls are government rules or laws that inhibit the formation of market-determined prices. Quotas are physical restrictions on output.
Price controls are government rules or laws that
inhibit the formation of market-determined prices.
Quotas are physical restrictions on output.
Price controls come in the form of either floors or ceilings.
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