Economics 2150A/B Lecture Notes - Lecture 4: Monopsony, Price Ceiling, Ontario Health Insurance Plan

• School: Western University
• Department: Economics
• Course: Economics 2150A/B
• Professor: Kristin Denniston

Document Summary

Homework 1 is posted on owl: you have 2 submission opportunities, due in one week on jan. 22 by midnight. Simplify (cancel out): a + b + e + f j: dwl = tsbefore tsafter = -(-j) = j. 1: the ts can differ depending upon who is consuming and who is providing the good. Tsbefore tsafter = e + f = dwl (we assumed that the people who supplied the apartments had the lowest costs) If the quantity supplied was 50 and the demand was 140: tsbefore = (a+b+e) + (c+f+g, people with the lowest wtsp actually get the 50 units. Dwlmax = tsbefore - tsafter = a + b + c + f h. You can have two different deadweight losses minimum or maximum. If we were using price rationing, the price would be bid up so that the people with the maximum willingness to pay would get the apartment.