Chapter-5-Supply--Demand--and-Government-Policies-供给和需求.pptVIP

Rent Control in the Short Run and in the Long Run Rental Price of Apartment Quantity of Apartments 0 Demand (a) Rent Control in the Short Run (supply and demand are inelastic) Panel (a) shows the short-run effects of rent control: Because the supply and demand for apartments are relatively inelastic, the price ceiling imposed by a rent-control law causes only a small shortage of housing. Panel (b) shows the long-run effects of rent control: Because the supply and demand for apartments are more elastic, rent control causes a large shortage. (b) Rent Control in the Long Run (supply and demand are elastic) Supply Controlled rent Rental Price of Apartment Quantity of Apartments 0 Demand Supply Controlled rent Shortage Shortage * Controls on Prices * How price floors affect market outcomes Not binding Set below the equilibrium price No effect on the market Binding constraint Set above the equilibrium price Surplus Some sellers are unable to sell what they want A Market with a Price Floor Price of Ice-Cream Cone Quantity of Ice-Cream Cones 0 Demand 100 (A) A Price Floor That Is Not Binding A binding price floor causes . . . a surplus because QS QD. nonprice rationing is an alternative mechanism for rationing the good, using discrimination criteria. (B) A Price Floor That Is Binding $3 Supply 2 Price floor Equilibrium price Equilibrium quantity Price of Ice-Cream Cone Quantity of Ice-Cream Cones 0 Demand 3 Supply $4 Price floor Equilibrium price 80 Quantity supplied Quantity demanded 120 Surplus * Examples: The minimum wage Price floor: minimum wage Lowest price for labor that any employer may pay * How the Minimum Wage Affects the Labor Market Wage Quantity of Labor 0 Labor demand Equilibrium employment (a) A Free Labor Market (b) A Labor Market with a Binding Minimum Wage Equilibrium wage Labor supply Wage Quantity of Labor 0 Minimum wage Quantity demanded Quantity supplied Labor surplus (unemployment) Labor demand Labor supply * The mini