Final answer:
Price controls are government laws meant to regulate market prices and come in two forms: price ceilings and price floors. Intended to restrict prices from exceeding certain limits, price controls do not solve the fundamental causes of market imbalances and can lead to severe outcomes like those seen in China's 'Great Leap Forward.'
Step-by-step explanation:
Price controls generally originate from government laws as a means to regulate prices in markets for goods, labor, and financial capital. These controls, including price ceilings and price floors, are intended to prevent prices from moving above or below predetermined levels. However, while they aim to kill the messenger of unwanted market signals, price controls can be counterproductive, as they do not address the underlying forces of demand and supply. This failure to adjust to changes in the market can have dire consequences, such as during China’s “Great Leap Forward,” where artificially low food prices led to a devastating famine.