Maximum Price A maximum price is a price ceiling, the market price cannot rise above it. A maximum price causes price to fall to P’, quantity demanded to rise to Qd and quantity supplied to fall to Qs. Resultantly there is excess demand .
A minimum price could be set by the government in an agricultural market to stabilize prices. Farmers are guaranteed a minimum price and the government buys up any excess supply. Below are the benefits and costs of an agricultural minimum price scheme: