notice that the price floor automatically creates a surplus because price floors are typically higher than the equilibrium price. If a higher price is established, than according to our law of demand, fewer people will consume and a surplus will result. Price floors can be a useful tool for rationing by the government. If demand becomes too great in any instance, a price floor would eliminate any shortage by promoting a higher price. A price ceiling, on the other hand, creates a shortage. With a shortage, the government can promote or encourage demand for a specific good or service. Primarily, the government introduces a price ceiling in an attempt to level the playing field for consumers. If the government applies a price ceiling, it typically means that the forces of supply and demand are becoming a social cost rather than a social benefit.