ECON 1000 Lecture 6: Chapter 6 Lecture Notes
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ECON 1000 Full Course Notes
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Chapter 6 lecture notes- government actions in markets. Where rents are really high, the government comes and does rent ceiling to control the rent so it"s not too high and not too low and is reasonable for everyone. Rent control is an intervention in market that leads to illegal market, long wait times, people moving, and shortages. When there is a tax on the buyer, the demand will fall. When there is a tax on seller, the supply will decrease/reduce. Monopolies are broken down because they are too powerful and they overprice everything because they are the only ones selling the item/product/service. Taxes can either be put on a buyer or a seller (done to reduce consumption of particular items such as alcohol and cigarettes) Tax on consumer= demand decreases, tax on seller= supply is going down. A price ceiling or price cap is a regulation that makes it illegal to charge a price higher than a specified level.