ECO 1104 Lecture Notes - Lecture 6: Price Ceiling, Price Floor, Conditionality

• School: University of Ottawa
• Department: Economics
• Course: ECO 1104
• Professor: David Gray

Document Summary

Developers stop building and landlords cease to maintain units: price decreases, quantity demanded increases, the shortage causes upward pressure on rents, and other perverse effects. The university tries to find other ways of raising revenue, sometimes by nickeling and diming its students. These unpopular policies may be annoying, but it is extremely rational from an economics perspective. It is the consumers who are exploiting the producers on the supply side: government comes to the rescue by imposing a price floor. Big surpluses emerge, placing downward pressure on prices. Situation is unsustainable unless the surplus is removed from the market: a price floor is ineffective unless it is above the equilibrium price, example: politician. Yes, there maybe surplus of peanuts, but better to have a too much than too little . This statement is dumb as fuck and wrong. C"mon, you"re a politician, what the fuck are.