Basic Economic Concepts Price Controls

Goals Identify shifts in supply and demand due to a natural disaster like Irma. Identify and correctly label a supply and demand graph illustrating a shortage or a surplus. Explain the two primary methods the government can control price and how that impacts a market.

Hurricane Irma

Shortage Surplus I. Price Controls Quantity demanded is higher than quantity supplied Excess Demand Surplus Quantity supplied is higher than quantity demanded Excess Supply

I. Price Controls Price Ceilings Price Floors Maximum price set by the government for a product. Ex. Rent Control Price Floors Minimum price set by the government for a product. Ex. Minimum Wage