VCU ECON 203 - Price Floor (2 pages)

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Price Floor

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Price Floor


An in depth description of price floor.

Lecture number:
Lecture Note
Virginia Commonwealth University
Econ 203 - Introduction to Economics

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ECON 203 1nd Edition Lecture 9 Outline of Last Lecture I price ceiling II price floor Outline of Current Lecture I price floor Current Lecture I Price Floor continued Ex minimum wages for unskilled labor A price floor creates a need for an allocating scheme i e first come first served personal preferences etc the market claims that all supplied jobs submitted applications are equal but there are small differences in applicants that make an employer chose 1 person over another Minimum wage causes lower Consumer surplus higher producer surplus but it creates fewer producers workers lower gains from trade deadweight loss present some type of allocating scheme must be adopted additional unemployment QSmw QDmw Minimum wage supprts productivity through technology People have wage contracts based on minimum wage A price floor imposes higher price than equilibrium Price floor vs Equilibrium These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute society is worse off with DWL consumers are also worse off PS is larger but for less producers

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