1. 4 The Market Strikes Back Low Price CeilingsHigh Price Floors Quantity ControlsExcise Taxes

2. Low Price Ceilings 24681012 4 8 $20 16 Price Quantity

3. 24681012 4 8 $20 16 Price Quantity Low Price Ceilings Customers waiting in line Suppliers out of the market

4. Quantity Price 100120140160180 1.8 1.9 2.0 2.1 2.2 2.3 2.4 2.5 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

5. 24681012 4 8 $20 16 Price Quantity Customers out of the market Suppliers waiting in line High Price Floors

6. Quantity Price 100120140160180 1.8 1.9 2.0 2.1 2.2 2.3 2.4 2.5 A high price floor prevents mutually beneficial transactions from taking place.

7. Controlling Quantities Quantity Price 6,0008,00010,00012,00014,000 1.8 2.2 2.6 3.0 3.4 3.8 4.0 4.4

8. 24681012 4 8 $20 16 Price Quantity Excise Tax Tax

9. 24681012 4 8 $20 16 Price Quantity Excise Tax Tax Customers pay $2 more than they did before the tax. Suppliers receive $3 less than before.