Principles of Macroeconomics / Unit 2 MAC 0119 short lesson, about 20 seconds
Price Controls
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The idea
A price control is a law setting a price instead of letting the market set it. A ceiling is a legal maximum, a floor a legal minimum.
In practice
Rent control is a ceiling; the minimum wage is a floor.
Where people slip
A control bites only on the binding side of equilibrium. Otherwise the market price is already legal.
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