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

LEARNING ACTIVITIES

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.