The Price Ceiling on Gasoline Is Binding ■■■ Price of 2,∴.but Gasoline when supply falls 1 Pr rIce ceiling 3..n the price ceiling becomes 4.…, resulting binding. In a shortage. ■■■■■ Demand Q1 Quantity of Gasoline Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. The Price Ceiling on Gasoline Is Binding... P1 Quantity of Gasoline 0 Price of Gasoline Q1 Demand S1 Price ceiling S2 2. …but when supply falls... P2 3. …the price ceiling becomes 4. …resulting binding... in a shortage
Rent Control Rent controls are ceilings placed on the rents that landlords may charge their tenants。 The goal of rent control policy is to help the poor by making housing more affordable One economist called rent control the best way to destroy a city, other than bombing. Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Rent Control Rent controls are ceilings placed on the rents that landlords may charge their tenants. The goal of rent control policy is to help the poor by making housing more affordable. One economist called rent control “the best way to destroy a city, other than bombing
Rent control in the short run Rental Price of Apartment Supply and Suppl demand for apartments are relativel, inelastic Controlled rent Shortage Demand Quantity of Apartments Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Rent Control in the Short Run... Quantity of Apartments 0 Rental Price of Apartment Demand Supply Controlled rent Shortage Supply and demand for apartments are relatively inelastic
Rent Control in the Long Run. Rental Because the Price of Apartment supply and demand for apartments are more elastic Supply rent control Controlled rent causes a large shortage Shortage Demand Quantity of Apartments Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Rent Control in the Long Run... Quantity of Apartments 0 Rental Price of Apartment Demand Supply Controlled rent Shortage Because the supply and demand for apartments are more elastic... …rent control causes a large shortage
Price floors When the government imposes a price floor, two outcomes are possible. The price floor is not binding if set below the equilibrium price. The price floor is binding if set above the equilibrium price, leading to a surplus Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Price Floors When the government imposes a price floor, two outcomes are possible. The price floor is not binding if set below the equilibrium price. The price floor is binding if set above the equilibrium price, leading to a surplus