ECON 103 Lecture Notes - Lecture 6: Social Cost, Marginal Cost, Marginal Utility
Document Summary
Lo1: housing market with a rent ceiling: price ceiling or price cap. 11/27/14 1:45:00 pm: government regulation that makes it illegal to charge a price higher than a specified level, price ceiling can have major effect depending on weather its imposed above or below equilibrium, price ceiling above equilibrium. This is because price ceiling does not constrain market forces: price ceiling below equilibrium. Price ceiling attempts to prevent the price from regulating the quantities demanded and supplied: rent ceiling, price ceiling applied to a housing market, rent ceiling creates. In a housing market, when rent is at eqm level the quantity of housing supplied equals the quantity of housing demanded: but at a rent set below equilibrium rent, quantity of housing demanded exceeds the quantity of housing. Increased search activity: search activity, the time spent looking for someone with whom to do business with, when a price is regulated and there is a shortage, search activity increases.