{"id":3470,"date":"2015-07-17T22:24:09","date_gmt":"2015-07-17T22:24:09","guid":{"rendered":"https:\/\/courses.candelalearning.com\/masterymacro2xngcxmasterfall2015\/?post_type=chapter&p=3470"},"modified":"2024-04-26T01:50:16","modified_gmt":"2024-04-26T01:50:16","slug":"introduction-to-price-ceilings-and-price-floors","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-macroeconomics\/chapter\/introduction-to-price-ceilings-and-price-floors\/","title":{"raw":"Introduction to Price Ceilings and Price Floors","rendered":"Introduction to Price Ceilings and Price Floors"},"content":{"raw":"

What you\u2019ll learn to do: analyze the economic effect of government setting price ceilings and floors<\/h2>\r\n\"Decorative\r\n\r\nIn this section, we will explore the outcomes, both anticipated and otherwise, when government\u00a0intervenes in a markets either to prevent the price of some good or service from rising \u201ctoo high\u201d or to prevent the price of some good or service from falling \u201ctoo low.\"\r\n\r\nFirst, we will take a look at what happens when prices are held below the equilibrium\u00a0level. Governments typically set a price ceiling to protect consumers by making necessary products affordable, but you'll come to see how this sometimes backfires by creating a market shortage.\r\n\r\nNext, we will see what happens when a price floor forces prices above a minimum standard, such as a\u00a0minimum wage. While a minimum wage seems like a great benefit for workers, you'll see that some effects of a minimum wage can actually hurt those in the workforce.","rendered":"

What you\u2019ll learn to do: analyze the economic effect of government setting price ceilings and floors<\/h2>\n

\"Decorative<\/p>\n

In this section, we will explore the outcomes, both anticipated and otherwise, when government\u00a0intervenes in a markets either to prevent the price of some good or service from rising \u201ctoo high\u201d or to prevent the price of some good or service from falling \u201ctoo low.”<\/p>\n

First, we will take a look at what happens when prices are held below the equilibrium\u00a0level. Governments typically set a price ceiling to protect consumers by making necessary products affordable, but you’ll come to see how this sometimes backfires by creating a market shortage.<\/p>\n

Next, we will see what happens when a price floor forces prices above a minimum standard, such as a\u00a0minimum wage. While a minimum wage seems like a great benefit for workers, you’ll see that some effects of a minimum wage can actually hurt those in the workforce.<\/p>\n\n\t\t\t

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Candela Citations<\/h3>\n\t\t\t\t\t
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CC licensed content, Original<\/div>