Analyze the role of government when determining prices in the markets. What powers can they exercise on consumers?

The government plays a crucial role in determining prices in the markets. They control costs by mandating price floors and price ceilings. Price ceiling refers to a regulation that stands for the maximum price that a product or service can retail and rent control is an appropriate example. In contrast, the price floor is a policy that represents the lowest price for particular products and services. The government uses its spending and tax policies to influence price levels and economic activities.

Furthermore, the government has put in place a Bureau of consumer protection to fight unfair and fraudulent businesses by conducting investigations and suing companies caught abusing the law. They can also exercise their powers on the consumers by developing rules to maintain a fair marketplace. They can also choose to educate consumers and businesses about their rights.