In the developing country, government may set the price for the product to control the economy and try to benefit the consumers. In some basic food like bread, the customers may put the ceiling price to that product. The ceiling price is the maximum price can be imposed by the government to be charged; therefore, that new price will be lower than the previous one, which can make the products more affordable for consumers. While setting the price ceiling, the government may experience one of the two situations: non-binding or binding price ceiling.
If the price is set above the equilibrium market price, the price ceiling will not be binding. In the case of non-binding price ceiling, the quantity of supply is larger than the quantity of demand for bread. That can reduce the negative effects that can happen. Consumers will not have to wait for long line to get bread which can save their time and go back to work to make money. In this case, price ceiling prevents the black market that can sell the products in the very high price. The cost that the consumers have to pay is just the price of bread they purchase, let assume that it is one dollar.
However, in the other case, binding price- ceiling, government actions can lead to many negative effects on the consumers. First of all, the shortage of bread may occur since many people now are able to buy breads- the quantity of demand is higher than the quantity of supply. Thus, it will cause the long line waiting to purchase breads. Consumers are now wasting their time, which is their first opportunity cost. Before the price ceiling, consumers may just have to wait for few minute, but now, they may lose their one valuable hour.
Purchasing the breads, each consumer loses one hour which is his hour of work. The consumers have to give up one hour which he can make money to one hour of waiting which he has no benefit.