🔒 🛡️ Micro Ch. 5: Price Controls and Quotas // Meddling with Markets
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Last updated 2:23 AM on 10/16/23
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5 Terms
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Price ceiling
A legal maximum on the price sellers can charge for a good or service (ex. rent control)
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Price floor
A legal minimum on the price buyers are required to pay for a good or service (ex. minimum wage)
3
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Quotas
Quantity controls; an upper limit on the quantity of some good that can be bought or sold (example: “Voluntary Export Restraint” program in 1981 limited # of cars exported to U.S from Japan)
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Binding
Means there is an effect on the market outcome, causing surplus or shortage
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Quota rent
Additional revenue earned by those who are allowed to import goods
Note 
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