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Binding price ceiling - PowerPoint PPT Presentation

Chapter 9

Chapter 9. The Analysis of Competitive Markets. Topics to be Discussed. Evaluating the Gains and Losses from Government Policies The Efficiency of a Competitive Market Minimum Prices Price Supports and Production Quotas Import Quotas and Tariffs The Impact of a Tax or Subsidy.

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Supply, Demand, and Government Policies

Supply, Demand, and Government Policies. Controls on Prices. Price ceiling A legal maximum on the price at which a good can be sold Usually imposed to appease a particular group of consumers Price floor A legal minimum on the price at which a good can be sold

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1. Which of the following are true about the results of a binding price ceiling and rent control?

1. Which of the following are true about the results of a binding price ceiling and rent control? . Long lines Inefficient market Inefficient allocation of resources Discrimination Bribery Rationing based on market prices 1,2,3 only All except 6 All of the above.

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Binding price ceiling - PowerPoint PPT Presentation

Chapter 9

Supply, Demand, and Government Policies

1. Which of the following are true about the results of a binding price ceiling and rent control?