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7.11: Outcome- Price Floors

  • Page ID
    249310
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    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.

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    A YouTube element has been excluded from this version of the text. You can view it online here: http://pb.libretexts.org/micro2/?p=212

    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.

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