What are the differences between Price Freeze and Price Ceiling?

A price freeze and a price ceiling are both measures used in economics, but they have different purposes and effects:

"Executive Order (EO) 39, signed for President Marcos by Executive Secretary Lucas Bersamin on Aug. 31, set the price ceiling for regular milled rice at P41 per kilo and P45 a kilo for well-milled rice nationwide, effective yesterday." - PHILSTAR

Price Freeze

a) A price freeze is a government-imposed restriction that prevents the prices of certain goods or services from increasing for a specified period. It essentially "freezes" the prices at their current levels.

b) Price freezes are often used during times of crisis or inflation to protect consumers from sudden and excessive price hikes.

c) During a price freeze, businesses are typically not allowed to raise their prices, even if their costs increase. This can lead to supply shortages if suppliers cannot cover their costs.

"Under Republic Act 7581, otherwise known as the Price Act, all basic goods are placed under a price freeze for 60 days, while prices of household liquefied petroleum gas and kerosene shall be frozen for 15 days." - Philippine News Agency

Price Ceiling

a) A price ceiling, on the other hand, is a government-imposed maximum price that can be charged for a particular good or service. It sets a legal limit on how high prices can go.

b) Price ceilings are often used to make essential goods and services more affordable for consumers. For example, rent control in housing markets is a common form of price ceiling.

c) While price ceilings aim to protect consumers by keeping prices low, they can lead to problems such as shortages, reduced quality, and reduced incentives for producers to supply the good or service.

"Unless sooner lifted by the President, price control of basic necessities under this section shall remain effective for the duration of the condition that brought it about, but not for more than sixty (60) days." - Under sec. 6 of RA no. 7581

The main difference is that a price freeze keeps prices at their current levels for a temporary period, while a price ceiling sets a maximum price that can be charged for a particular item. Both measures are used to address issues related to pricing, but they come with their own set of consequences and considerations.