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Unformatted text preview: Black Markets • Reduced Costs to Discrimination Why Price Ceilings/Rent Controls? • Lots of negative effects • Persistent Shortage • Inefficiencies • Black Market/Illegal Activities/Wasted Activities Why Price Floors? • Lots of negative effects • Persistent Surplus • Inefficiencies • Black Market/Illegal Activities/Waste • Explanations… • People don’t understand economics • Market is not competitive • Benefits the sellers, who may have political power • May wish to protect some sellers 15:21 15:21...
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This note was uploaded on 10/04/2011 for the course ECON 201 taught by Professor C.liedholm during the Spring '07 term at Michigan State University.
- Spring '07