Government intervention in the marketThe government can choose to set prices different from those set by the markets. Prices cannot fall below a certain minimum. For example, in agriculture, the government may choose to subsidize farmers, set production quotas, or offer price supports. The government can decide to set price ceilings or floors. The government can also choose to increase or decrease taxes on certain products. In this essay, we will examine the effects of government intervention from an economic perspective. According to the Financial Mail (2006), in February this year, Zimbabwe's inflation rate reached the highest level in the world – an annual rate of 782%. Zimbabwe's annual inflation rate is estimated to have exceeded 1,000% by the end of this month, according to calculations by the regionally represented financial services group Imara (Mail and Guardian, 2006). As inflation reaches ridiculous rates, the Zimbabwean government is forced to offer some sort of relief to its people. Prices of basic goods such as food and fuel are rising sharply almost daily, while wages have remained roughly the same (Financial Mail, 2006). Due to public or rather social concerns, the government was forced to implement price controls for basic commodities such as food, fuel and transportation costs. “A price ceiling is a regulation that prohibits charging a price above a specified level. » (Parkin et al., 2006: 119). The Zimbabwean government has attempted to set a price ceiling for certain products, such as fuel and food. This means that suppliers cannot set prices higher than the stipulated price. For a price ceiling to be effective according to Parkin and ...... middle of paper ...... fortune of the country. As we have noted in this essay and as Sloman (1997: 82) points out, maximum prices reduce the quantity produced of an already scarce good. Basic commodities such as food and fuel are already in short supply in Zimbabwe, therefore the implementation of price controls will create further shortage and this is the problem Zimbabwe still faces today. LIST OF REFERENCES Financial Mail, 2006. Zim inflation flirts with 800%. Financial Mail March 10, 2006MAKONI, V., 2005. Fuel prices worsen workers' situation. Zimbabwean July 8MULEYA, D., 2006 Zimbabwe's inflation expected to exceed 1,000% on working day 26 APARKIN, M, POWELL, M and MATTHEWS, K., 2005. Economics (6e) Harlow England: Addison-Wesley. SLOMAN, J., 1997. Economics (3rd) London: Prentice HallTAYLOR, AJ, 2006. Desperate measures for Zim. Financial Mail April 24Desperate measures for Zim