4 The Market Strikes Back Low Price CeilingsHigh Price Floors Quantity ControlsExcise Taxes

Low Price Ceilings $20 16 Price Quantity

$20 16 Price Quantity Low Price Ceilings Customers waiting in line Suppliers out of the market

Quantity Price A high price ceiling prevents mutually beneficial transactions from taking place. Customers who would have been happy to pay $2.10 Suppliers who would have been happy to sell at $2.10

$20 16 Price Quantity Customers out of the market Suppliers waiting in line High Price Floors

Quantity Price A high price floor prevents mutually beneficial transactions from taking place.

Controlling Quantities Quantity Price 6,0008,00010,00012,00014,

$20 16 Price Quantity Excise Tax Tax

$20 16 Price Quantity Excise Tax Tax Customers pay $2 more than they did before the tax. Suppliers receive $3 less than before.