ECON 1201 Lecture Notes - Lecture 9: Price Floor, Economic Surplus, Deadweight Loss
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Document Summary
Econ 1201 , lecture 9 , shared economy. Business that create online platforms where individuals can share their possessions/assets or market their skills. The shared economy increases the price elasticity of supply. Gov. regulations were/are adopted to ensure minimum quality standards, provides consumers with information regarding the quality or trustworthiness of the seller. Problem with asymmetric information : the seller knows more about the quality of the good sold than the buyer does. Prices are signals wrapped in an incentive. Prices are messengers of important economic information that we respond to. The setting, maintenance, or control of prices by government. They suppress price and its role as a messenger of economic information. Public policy is implemented that has the effect of shooting the messenger . Price ceiling - a legal maximum on the price at which a good can be sold. Price floor - a legal minimum on the price at which a good can be sold.
