1Price Controls in Competitive Markets1. Motivation for price controls. 2.Price floors. 3.Price ceilings.4.Efficiency losses.Price ControlsPrice controls are laws that set the market price or put limits on it. Floors and CeilingsA price floor sets a minimum price. Motivation: help sellersby forcing prices up. A price ceiling sets a minimum price. Motivation: help buyersby forcing prices down. Price Floors •Sellers who get higher prices.Losers: •Sellers who no longer sell.• Buyers.•Society as a whole (lost surplus).Winners: Elasticity and Price Floors
has intentionally blurred sections.
Sign up to view the full version.