Price Floors and Price Ceilings are Price Controls, examples of government intervention in the free market which changes the market equilibrium. They each have reasons for using them, but there are large efficiency losses with both of them. Price Floors are minimum prices set by the government for certain commodities and services that it believes are being sold in an unfair market with too low of a price and thus their producers deserve some assistance. Price floors are only an issue when they are set above the equilibrium price, since they have no effect if they are set below market clearing price. When they are set above the market price, then there is a possibility that there will be an excess supply or a surplus. If this happens, producers who can't foresee trouble ahead will produce the larger quantity where the new price intersects their supply curve. Unbeknownst to them, consumers will not buy that many goods at the higher price and so those goods will go unsold. There will be economic harm done even if suppliers can look ahead and see that there isn't sufficient demand and cut back on production in response.

There is still deadweight loss associated with this reduction in quantity, reflected in the loss of consumer and producer surplus at lower levels of production. Producers can gain as a result of this policy, but only if their supply curve is relatively elastic and therefore they have no net loss. Consumers will definitely lose with this kind of regulation, as some people are priced out of the market and others have to pay a higher price than before. There are numerous strategies of the government for setting a price floor and dealing with its repercussions. They can set a simple price floor, use a price support, or set production quotas. Price supports sets a minimum price just like as before, but here the government buys up any excess supply. This is even more inefficient and costly for the government and society as a whole than the government directly subsidizing the affected firms. Production quotas artificially raise the price by restricting production using either mandated quotas or giving businesses incentives to reduce their production.

In America, this latter technique is used widely with agriculture. The government pays farmers to keep some portion of their fields fallow, thus elevating prices. Like price supports, the policy would be more efficient and less costly to society if the government directly subsidized farmers instead of setting a production restriction. Price Ceilings are maximum prices set by the government for particular goods and services that they believe are being sold at too high of a price and thus consumers need some help purchasing them. Price ceilings only become a problem when they are set below the market equilibrium price. When the ceiling is set below the market price, there will be excess demand or a supply shortage. Producers won't produce as much at the lower price, while consumers will demand more because the goods are cheaper. Demand will outstrip supply, so there will be a lot of people who want to buy at this lower price but can't. Still, if the demand curve is relatively elastic, then the net effect to consumer surplus will be positive.

Producers are truly harmed, as their surplus is doubly hit with a reduction in the number of firms willing to take that lower price, and those who remain in the market have to take a lower price. Ashley Furniture Sale EventThe resulting shortage of goods can lead to consumers having to queue up in line to get the good, government rationing, and even the development of a black market dealing with the scarce goods. Better Homes And Gardens Grill WalmartThis is what occurred with the energy crisis in America during the 1970s, when cars had to line up on the street in order to just get some government rationed amount of gasoline.Weight Loss Taking MetforminA Safe Way to Remove Lead Paint This is a job best left to the pros Q: My husband and I have recently purchased a house built in 1917.

I decided before adding another layer of paint to the many layers, I would strip the old paint off first. We used a heat gun on one section and indoor paste stripper on another section. Both methods took awhile, with the stripping paste being the messiest. I also later did a home lead paint test and it came out positive. What is the safest, easiest and fastest way to get rid of the old paint? We would like to do all the rooms, but need to stick to our budget. Is it necessary to hire a professional to remove the paint since we know there are some layers of lead paint? – Tina, Lincolnton, North Carolina A: Steve Thomas replies: Lead paint is only dangerous when it becomes detached from the wall and can be ingested by children, for whom it is extremely dangerous, and adults, for whom it is only slightly less dangerous. An amateur attempt at lead removal can contaminate your entire house and leave you with a Superfund site for which you are responsible. We recommend that you hire a professional to remove lead paint.

I personally wouldn't touch it. Professional inspections of your home for lead paint can cost hundreds of dollars. That's why you'll find do-it-yourself kits in many home centers and hardware stores. Our last tests of lead test kits confirm that some are a good first step in identifying whether there's a problem, but we also found confusing instructions, challenging procedures, and inaccurate results. We tested several kits; some were faster and easier to use than others. Sound Advice on Home-Based Kits Lead-based paint in homes was outlawed in the United States in 1978; many homes built before then probably have some. Lead paint can gradually deteriorate into flakes, chips, and fine dust that's easily inhaled or eaten by small children, even when it's covered by many layers of unleaded paint. Lead poisoning has several effects, which can include brain damage and diminished mental and physical development. Lead can sicken people of any age, but young children are at greatest risk;

hundreds of thousands of children in the U.S. have elevated levels in their blood, according to the National Center for Health Statistics. We hired a licensed lead inspector to scan for lead in three pre-1960 homes owned by Consumer Reports staff members. The homeowners then used do-it-yourself lead test kits. Most of the kits quickly indicated whether lead was present. The kits we tested detected lead levels as low as 2,000 parts per million (ppm) in our home-based tests. In our lab tests, some lead test kits detected lead at levels below 1,000 ppm. None of them falsely identified paint in a Consumer Reports lab painted in 1990 as having lead. Some kits can be a reasonable first step in detecting lead, as long as you follow instructions precisely. All lead test kits require practice. Exposing the layers of old paint took strength, dexterity, and lots of practice. Home lead test kits use one of two chemicals to detect lead by color change. But correctly "reading" color changes when lead levels were low also took practice.

How to Choose a Lead Test Kit Which lead kit you should use depends on paint color. If you're color-blind, don't use a kit that turns pink or red. Also note that lead test kits use one of two chemicals—sodium sulfide or rhodizonate—to detect lead by color change. Consider buying one of each type to test paint of all colors. Here's how to keep yourself and your family safe. Start With a Blood Test All children should be screened at ages 1 and 2, according to the Environmental Protection Agency. Recent renovations or repairs to a building built before 1978 could disturb older paint and are more reason to test a child's blood. Previously, a child was considered to have a blood lead level of concern if the test result was 10 micrograms per deciliter of blood or higher (mcg/dL). But in May 2012, the federal Centers for Disease Control and Prevention changed its recommendation, establishing 5 mcg/dL as the new reference level to more accurately reflect evolving evidence of damage done by any childhood lead exposure.

For more details, see CDC's What Do Parents Need to Know to Protect Their Children? Commending the CDC for making the change, the American Academy of Pediatrics issued a statement noting that it affirmed what pediatricians have long recognized: "There is simply no safe level of lead exposure for children, " said AAP President Robert W. Block, MD. If a child tests negative for lead and you live in a house built before 1978, you might still want to know whether any painted surfaces contain lead, as remodeling and even sanding could release it. Rhodizonate-based lead kits can yield false positives on red or pink paint; sulfide-based kits can yield false negatives or positives on dark paint. For more reliable results, use one of each type of kit. Follow instructions and ensure that every layer of paint is exposed. Depending on the kit, you can test several areas for less than $100. Your home might not be the only source of lead. Children can be exposed to lead if they attend day care in a pre-1978 building.

Toys can be another source, as we reported in New Worries Over Lead, for which we tested some lead kits on dishes, toys, and other household objects. Toys have lower lead limits than pre-1978 house paint. Check the website of the Consumer Product Safety Commission for recalls. Call a Pro for Prompt Action If your child tests positive for lead, the quickest route to detection and stabilization is to find a certified lead inspector or risk assessor. Since 2010, contractors renovating pre-1978 buildings must have certification. Your regional EPA office has data on certified professionals; or you can find more information at epa.gov/lead/pubs/renovation.htm. Some homeowners are eligible for government-insured loans to help defray costs. Another option is to hire a trained XRF (X-ray fluorescence) technician to screen for lead. Or you can send samples to a lab instead. If you choose to do that, be aware that the results are measured on a different scale: parts per million, not milligrams per square centimeter.