16633 Chapter Notes - Chapter 4: Market Failure, Amcor, Avoidance Speech
Document Summary
Changes in prices and quantities sold in markets primarily occur because of: If one of the non-price determinants of demand (in chapter 3) changes, then the equilibrium price and quantity will change. An increase in a non-price determinant of demand will raise the price and quantity supply. A decrease in a non-price determinant of demand will lower the price and quantity supply. For various reasons, governments implement price controls to influence market forces. Two types of price controls: price ceilings, price floors. A legally established maximum price a seller can charge. Governments impose these to ensure that the wider community can access the product or service sold. It always results in an excess of quantity demanded over quantity supplied at the ceiling price: consequences: A legally established minimum price a seller can be paid. Governments impose these to lower the consumption of a good, or ensure some employees are not disadvantaged.
