In be allowed to fall to eliminate this

In Malaysia, government intervention conjointly exists on top of things of costs on product and services. The government would like to retain worth|the worth|the value} mechanism either on top of or below the equilibrium value though there’ll be no shortage or surplus at the equilibrium price. If the govt. sets a minimum value on top of the equilibrium, a floor, there’ll be a surplus. Price won’t be allowed to fall to eliminate this surplus. However, on the opposite hand, if the govt. sets a most value below the equilibrium, a value ceiling, there’ll be a shortage. Price will not be allowed to rise to eliminate this shortage.Government sets minimum prices to prevent them from falling below a certain level. This is because the government wants to protect producers a incomes. In the factor of wages (the prices of labor), minimum wage legislation can be used to prevent workers wage rates from falling below a certain level.This is to prevent them from rising above a certain level. In war time, inflation, crisis or times of famine, the govt. might set most costs for basic product so poor folks cannot afford to shop for them. These resulting shortages however create further problems.


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