What you’ll learn to do: analyze the consequences of the government setting a binding price floor
In this outcome, we will see what happens when a price floor forces prices above a minimum standard, such as a minimum wage. Watch this video about Edgar the Exploiter to understand how the minimum wage can both help and harm workers.
The specific things you’ll learn in this section include:
- Identify the market’s equilibrium price and quantity for a price floor
- Compute and graph the market surplus resulting from a price floor
- Explain the outcome of a binding price ceiling or price floor on the price and quantity of a product sold
The learning activities for this section include:
- Reading: Price Floors
- Case in Point: Organic Foods
- Self Check: Price Floors
Take time to review and reflect on each of these activities in order to improve your performance on the assessment for this section.