ECON 103 Lecture Notes - Lecture 6: Price Ceiling, Price Floor, Rent Regulation
2 May 2019
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Reduces the amount of what consumer is actually getting, price ceiling decreases quantity. Reduce quality of the good create a shortage, price is lower, quantity demanded is more than quantity supply. Create a need to figure out which demand is the lucky one is getting the limited supply, Price ceiling consequences: and which one will not get the supply supply, Same note, dif wording: created a surplus that doesn"t correct itself, the market requires a mechanism to determine which lucky sellers are the ones to actually make sales. 3. reduces the amount the consumers actually get: because the price floor increases the quantity supply, it decreases the value of the market good. Rent control: landlord can control it, only ny and ca have rent control. Price floor: price cannot be completed downward, price stay up, surplus remain, create a permanent surplus of goods, service, require which seller will get to sell, and which seller won"t get to sell.
