想 Supply, Demand and HEL Government Policies Cha later 6 Copyright o 2001 by Harcourt, Inc All rights reserved. Requests for permission to make copies of any part of the work should be mailed to Permissions Department, Harcourt College Publishers 6277 Sea harbor Drive. Orlando Florida 32887-6777
Supply, Demand and Government Policies Chapter 6 Copyright © 2001 by Harcourt, Inc. All rights reserved. Requests for permission to make copies of any part of the work should be mailed to: Permissions Department, Harcourt College Publishers, 6277 Sea Harbor Drive, Orlando, Florida 32887-6777
Supply, Demand, and Government policies In a free, unregulated market system, market forces establish equilibrium prices and exchange quantities While equilibrium conditions may be efficient, it may be true that not everyone is satisfied One of the roles of economists is to use their theories to assist in the development of pe olicies. Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Supply, Demand, and Government Policies In a free, unregulated market system, market forces establish equilibrium prices and exchange quantities. While equilibrium conditions may be efficient, it may be true that not everyone is satisfied. One of the roles of economists is to use their theories to assist in the development of policies
Price Controls Are usually enacted when policymakers believe the market price is unfair to buyers or sellers. Result in government-created price ceilings and floors Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Price Controls... Are usually enacted when policymakers believe the market price is unfair to buyers or sellers. Result in government-created price ceilings and floors
Price Ceilings Price Floors Price Ceiling A legally established maximum price at which a good can be sold Price floor A legally established minimum price at which a good can be sold. Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Price Ceilings & Price Floors Price Ceiling A legally established maximum price at which a good can be sold. Price Floor A legally established minimum price at which a good can be sold
Price Ceilings Two outcomes are possible when the government imposes a price ceiling: The price ceiling is not binding if set above the equilibrium price. The price ceiling is binding if set below the equilibrium price, leading to a shortage. Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Price Ceilings Two outcomes are possible when the government imposes a price ceiling: The price ceiling is not binding if set above the equilibrium price. The price ceiling is binding if set below the equilibrium price, leading to a shortage