Price Ceiling - Coursework Example

A price ceiling is implemented in a bid to avoid consumer exploitation by ensuring that the basic commodities are available at affordable prices. In the oil industry, the prices have been skyrocketing thus adversely affecting the economy. This is mainly because it constitutes a significant percentage of energy sources. In the implementation of price control, consideration of the cause of rising fuel prices should be considered. In some instances, the main cause of the rise in prices is the shortage in supply. Under such circumstances, a price ceiling is not a solution. As such, increasing production and use of other alternative sources of energy could be the ultimate solution (Whittington & Delaney, 2011).
Moreover lowering of quality in a bid to reduce the production cost, discrimination, and the increased use of the black market is evident (Arnold, 2010). Due to the shortage, queuing for the product is evident with the elderly and physically challenged being disadvantaged. This is usually addressed through rationing.