VCC Economics Assignment 03

VCC Economics Assignment 03 - Don Uhrig Principles of...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Don Uhrig Principles of Economics-Macro, ECO-2013, Su 1700-1945 Professor Dr. Jim Chase Assignment #3 Define price ceilings and price floors. Give examples of both: A price ceiling is a government-imposed limit on how high a price can be charged on a product. Price ceilings are often intended to protect consumers from certain conditions that could make items or services that are necessities unattainable. But they can also cause problems if they are used for a prolonged period of time without controlled rationing. It is of importance to me as a student to remember that the price ceiling is positioned below the price floor on a supply and demand graph. A price floor is a government, or group, imposed limit on how low a price can be charged for a product. In order for a price floor to be effective, it must be greater than the equilibrium price. The equilibrium price is the price toward which the invisible hand drives the market. At equilibrium price, quantity demanded equals quantity supplies. That would be a prefect economy with no waste.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/23/2010 for the course BUS ECO2013 taught by Professor Dr.chase during the Fall '09 term at Valencia.

Page1 / 2

VCC Economics Assignment 03 - Don Uhrig Principles of...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online