ECON101 Lecture 10: Price Ceilings and Elasticity of Supply and Demand

• School: University of Alberta
• Department: Economics
• Course: ECON101
• Professor: Gordon Lee

Document Summary

Price ceilings: when the government sets the maximum price (the highest price they"ll allow you to charge). (e. g. rent ceilings can result in landlords charging illegal fees to make their money back): effective price ceiling: results in a shortage. Quotas: the maximum quantity allowed (the most you are allowed to sell). There are several different ways to write out this formula/think about it, considering the following terms: Then nd (elasticity of demand) = {(600 1000) / (9 7)} x {(9 + 7)/2} / {(1000 + 600)/2}