1. Price Ceiling S D Price Quantity Qs Qd Market-clearing price
Legal price ceiling set
below market price

2. Price Floor Price Quantity Qd Qs D S
Legal price floor set above market price
Market-clearing price

3. Class Activity Minimum wage Agriculture price minimums Rent control
“Usury” laws on credit card loans, setting maximum interest rates
Price controls on gasoline in the 1970s
Instructions:
Decide whether each is a price floor or price ceiling.
Decide whether consumers or producers would favor the control.
Produce a market graph illustrating the result of this price control.