Read the following statements carefully.
Statement 1: Price ceiling is maximum price of a product set at level above the equilibrium price.
Statement 2: Government uses price ceiling to set the prices of non-essential commodities.

Both the statements are false.

The correct answer is Option 2: Both the statements are false.

Statement 1: False

• Price ceiling is a maximum price set by the government below the equilibrium price, not above.
• It is imposed to make essential goods affordable to consumers.
• If the price ceiling were above equilibrium, it would have no effect because market forces would naturally set the price lower.

Statement 2: False

• The government imposes price ceilings on essential commodities like food, medicines, and rent to prevent excessively high prices.
• Non-essential commodities do not usually have price ceilings because the government does not regulate their prices.