Ch 3 Price Ceiling and Floor note.doc

3 Pages
139 Views
Unlock Document

Department
Economics
Course
ECON 1900
Professor
Nancy Carson
Semester
Winter

Description
Price Ceilings and Price Floors Price ceiling: Price ($/unit) The price cannot exceed the ceiling 90 S price. MAX price 80 To be effective, the price ceiling must be set below the equilibrium price. 60 An effective price ceiling causes Excess Demand or a shortage. 40 Price ceiling For example, if the government sets a Price ceiling = $30, then 20 Quantity demanded = 60 units and D Quantity supplied = 20 units, causing 0 a shortage of 60-20 units. 20 40 60 80 90 Widgets (units) =40 unit Shortage Price floor: Price ($/unit) S Price cannot be lower than the floor
More Less

Related notes for ECON 1900

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit