LESSON 20: Inflation Reduction Act (IRA) and Price Controls
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4 Terms
What is the Inflation Reduction Act (IRA) of 2022?
The IRA was passed in 2022 during the Biden administration; it caps insulin cost at $35 per month.
Why is the Inflation Reduction Act a price-ceiling law?
Because it caps insulin costs at $35 per month. A price ceiling is an artificially induced equilibrium price that is not market-determined. The government sets a maximum price below what the market would normally charge which is the definition of a price ceiling.
What is a price ceiling?
A price ceiling is an artificially induced equilibrium price that is not market-determined.
What are the two forms of disqualbrim pricing?
Disqualbrim pricing comes in two forms: Price Floor and Price Ceiling. A price floor is a minimum price (like minimum wage); a price ceiling is a maximum price (like the insulin cap). Neither is determined by the market.