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Unformatted text preview: = people arrive early and wait in long lines = sellers rational good based on personal biases GASOLINE 1973 P S2 S1 P*2 Pc Price Ceiling P*0 * Because OPEC raised the price of Crude oil, the supply of crude shifts * Price ceiling is now binding and a shortage of gasoline is the consequence D1 Q*0 Q HOUSING Friday, September 29, 2006 P S * Apartment are rationed A # of ways including long waiting lists, land lords may give preference to tenants hat are willing to pay under the table. P*0 * Landlords have no incentive to maintain the property when they have people that are waiting to get in. Pc Price Ceiling D Q*0 Q PRICE FLOORS P S Pf2 Price Floor = With a binding price floor, a surplus will develop, so some producers cant sell all that they want P*0 Pf Price Floor = binding (permanent shortage) D * Buyers will have certain bases that will lead them to buy form particular sellers Q*0 Q...
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This note was uploaded on 03/20/2008 for the course EC 201 taught by Professor Xasdf during the Fall '08 term at N.C. State.
- Fall '08