ECN 104 Lecture Notes - Lecture 4: Rent Regulation, Deadweight Loss, Economic Equilibrium

• School: Ryerson University
• Department: Economics
• Course: ECN 104
• Professor: German Pupato

Document Summary

C hapter 5 p rice c ontrols and q uotas : meddling with markets. T he market price moves to the level at which the quantity s upplied equals the quantity demanded. B ut, this equilibrium price does not neces s arily pleas e either buyers or s ellers. T herefore, the g overnment intervenes to reg ulate prices by impos ing price controls, which are leg al res trictions on how hig h or low a market price may g o. Price ceiling is the maximum price s ellers are allowed to charg e for a g ood or s ervice. Price floor is the minimum price buyers are requires to pay for a g ood or s ervice. T he c anadian g overnment-impos ed ceiling s on aluminum, s teel, s ug ar, milk and many other products during world war ii. E ffects of p rice c eiling.