Price Controls - Government Policies Price Controls and...

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Government Policies Price Controls and Taxes
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Price Controls Not everyone is happy with the prices set by market Supply and Demand. For example: Farmers think the prices for their products are too low. Apartment dwellers often think rents are “unfairly” high.
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Price Controls Price Ceiling: A legal maximum price at which a good can be sold. Price Floor: A legal minimum price at which a good can be sold.
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Governments usually implement price controls  out of a concern for fairness (equity).  Examples: Price floors : Minimum wage, price supports in  agricultural markets. Price Ceilings :  Rent Control, Gas Prices (under  regulation), drug prices (?)
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effective  price control is one that has an impact  (“effect”) on the market. Effective price ceiling:  A price below the equilibrium  price. Effect price floor:  A price above the equilibrium  price. What is the impact of effective price controls?:
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Price Controls - Government Policies Price Controls and...

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