ECON101 Lecture Notes - Production Quota, Overproduction, Price Ceiling

151 views9 pages
purplechimpanzee495 and 51 others unlocked
ECON101 Full Course Notes
79
ECON101 Full Course Notes
Verified Note
79 documents

Document Summary

Price ceiling (price cap): a regulation that makes it illegal to charge a price higher than a specific level. A price ceiling set above the equilibrium price has no effect. Reason is that the price ceiling does noty constrain the market forces. The force of the law and the market forces are not in conflict. A price ceiling below the equilibrium price has powerful effects on a market. Reason is that the price ceiling attempts to prevent the price from regulating the quantities demanded and supplied. The force of the law and the market forces are in conflict. Rent ceiling: when a price ceiling is applied to a housing market. A rent ceiling set below the equilibrium rent creates: a housing shortage, a black market. At a rent set below the equilibrium rent, the quantity of housing demanded exceeds the quantity of housing supplied- there is a shortage.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Questions