93 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

Icon for the Creative Commons Attribution 4.0 International License

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

Share This Book