Nothing shows the role of price fluctuations in a free market like the absence of such price fluctuations. What happens when prices are not allowed to fluctuate freely according to supply and demand, but instead are set by law, as under various kinds of price-control legislation? Price controls have existed, at one time or another, in countries around the world over a period of centuries -- in fact, for thousands of years -- and have applied to everything from food to housing to gasoline and medical services.
Typically, price controls are imposed in order to keep prices from rising to the levels that they would reach in response to supply and demand. The political rationales for such laws have varied from place to place and from time to time, but there is seldom a lack of rationales whenever it becomes politically expedient to hold down someone's prices in the interests of someone else whose political support seems more important.
Examples include rent control, food price ceilings, and price controls on medical services -- all designed to set a limit on how high prices can go. In addition to laws putting a "ceiling" on how high prices will be allowed to rise, there are also laws establishing "floor" prices, which limit how far prices will be allowed to fall.
Many countries have set limits to how low certain agricultural prices will be allowed to fall, sometimes with the government being obligated to buy up the farmer's output whenever free market prices go below the specified levels. Equally widespread are minimum wage laws, which set a lower limit to how low a worker's wage rate may be. Here the government seldom offers to buy up the surplus labor which the free market does not employ, though it usually offers unemployment compensation,