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Motivation • Has anyone been to a sold out concert recently? Who did you see? What was the ticket price?
Objective • Understand the concepts of price floors and price ceilings. • Be able to explain how milk and concert tickets are also examples of floors and ceilings. • Read and comprehend the examples of minimum wage and rent control.
Basic Price Floors and Price Ceilings Examine handout 9-1 and do questions 1- 4. Relate the concepts to the charts on floors and ceilings.
Price Ceiling • a maximum price set by the government (or an agency) below the Equilibrium point. (For example: Concert tickets) • Helps Buyers. • Creates a shortage. • A black market emerges.
Price Floor • a minimum price set by the government (or an agency) above the Equilibrium point. (For example: milk) • Helps Sellers • Creates a Surplus
Individual Practice • Read articles on Rent Control and Minimum Wage. • Answer questions regarding each of them in relation to price floors and ceilings.