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  • Yee Mei, Rachel Chan

    December 14, 2021 at 12:04 am

    With the recent price hike happening in Malaysia, government is being pressure to do something to control the price hike such as bread, vegetables, noodles, and few others. The prices burden the people and need Government intervention. Inter-ministerial discussion need to happen and formulate a pricing index and lastly to monitor. This is to ensure the prices of necessities are affordable thru price control normally. Price control happen in 2 ways in price floors and price ceiling. With setting the price ceiling , the goods price do not hike above the ceiling price. A good example is rental control, with the price ceiling, the maximum rental price is set. This allow the house or apartments affordable for low and middle income tenants. As for price floor, it is not allowed for the goods price to be below the minimum. This is normally applied on agriculture goods such as wheat. This is because the in agriculture, there are unforeseen nature impact that can impact agriculture volume. Thus, with setting the price floor, it help boost and stabilize the farmers’ income. Both ways (price control or price ceiling) do have their own pros and cons, depending the goods type and policy define. As every or most country’s government will do this, it need to be apply wisely to suit the country’s need and make it affordable for its people. To ensure effectiveness, there must be monitoring and re-adjustment price controls if require.

    Price hike will change consumer behaviour on their purchasing patterns such consumer will look for alternatives or buy in smaller quantity instead. This is as per Law of Demand stated. Thru understanding of this consumer behaviour, the company will need to adjust or create new business strategies to tackle this.

    We have seen price controls on basic necessities like chicken during festive season. This surely does help to avoid price increase. This move is very helpful to consumers as we do not have to buy expensive chicken during festive season. It is a also expected behavior that there will be more demand for chicken due to festive season and thus with the price control, seller could not increase the chicken price too high.


    Azman N.H (2021). Govt can do more to curb food prices. https://themalaysianreserve.com/2021/04/22/govt-can-do-more-to-curb-food-prices/