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Unformatted text preview: Elasticity and Price Floors When demand is elastic, more sellers are losers and fewer are winners. Price Ceilings • Buyers who pay lower prices. Losers: • Buyers who no longer buy. • Sellers. • Society as a whole (lost surplus). Winners: 2 Elasticity and Price Ceilings When supply is elastic, more buyers are losers and fewer are winners. Efficiency Losses from Price Controls • Loss of surplus (already covered). • Enforcement costs. • Wasteful activity by excess demanders or suppliers. • Quality degradation....
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This note was uploaded on 04/02/2008 for the course ECON 200 taught by Professor Cramer during the Spring '07 term at Arizona.
- Spring '07