101 Outcome: Price Floors

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.

License

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Microeconomics by Lumen Learning is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.

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