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Government and Price-Determination can be understood as follows:
The government might intervene in the market and mandate the maximum price (price ceiling) or the minimum price (price floor) for a commodity or service.
A price ceiling is the maximum price limit which the government sets to ensure that prices don’t rise above that particular limit (medicines)
A price floor is the minimum price which the Government sets to support the required commodity or service in a society (wages)
Social cost is the cost of an economic decision, whether private or public, borne by the society as a whole.
Marginal social cost is the change in social costs due to unit change in output.
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explain the model
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