Price controls

A price ceiling limits price from going above a certain level. When set below the equilibrium price P*, a price ceiling will limit the quantity produced and sold in the market. 

Note that the extent to which quantity will drop in response to a decrease in the price ceiling depends on the elasticity of supply. 

A price floor limits price from going below a certain level. When set above the equilibrium price P*, a price ceiling will limit the quantity produced and sold in the market. 

The extent to which quantity will drop in response to a an increase in the price floor depends on the elasticity of demand