L4 - EC 1 UCLA Dr. Bresnock Lecture 4 Market Analysis...

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EC 1 UCLA Dr. Bresnock Lecture 4 Market Analysis Continued In the table below, several points will be made to review the material that was covered in the last lecture. Then we will proceed to tabulate new information pertaining to our market analysis. Table 1 Market Analysis (1) (2) (3) (4) (5) (6) (7) 100 11 40 90 10 50 80 9 60 70 8 70 60 7 80 50 6 90 40 5 100 30 4 110
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EC 1 Lecture 4 A. Bresnock 2 Graph 1 Market Equilibrium and Adjustment to a Surplus Graph 2 Market Equilibrium and Adjustment to a Shortage
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EC 1 Lecture 4 A. Bresnock 3 Price Controls -- one form of government intervention in markets. There are two types of price controls, P C . 1) Price Ceilings -- For an effective price ceiling to work, it is set so that the market price will not rise above P C . Results: Misallocation of resources = too little is produced. Graph 3 Price Ceiling vs Market Equilibrium (Ex. Rent control) 2) Price Floor -- For an effective price floor to work, it is set so that the market price will not fall below P C . Results: Misallocation of resources = too much is produced. Graph 4 Price Floor vs Market Equilibrium (Ex. Agricultural price supports)
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EC 1 Lecture 4 A. Bresnock 4 Price Elasticity – measures the responsiveness of the % change in quantity demanded (Q
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This note was uploaded on 05/20/2010 for the course ECON 180-004-20 taught by Professor Bresnock during the Winter '09 term at UCLA.

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L4 - EC 1 UCLA Dr. Bresnock Lecture 4 Market Analysis...

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