- Wihimum Poriee Purperse A Afti Cffective Minimum Poice Cuould Sat A Logelinit On The Minimum Porice That Could Be Choog 1 (96.7 KiB) Viewed 47 times
- Wihimum Poriee Purperse A Afti Cffective Minimum Poice Cuould Sat A Logelinit On The Minimum Porice That Could Be Choog 2 (81.75 KiB) Viewed 47 times
Wihimum poriee Purperse A afti cffective minimum poice cuould sat a logelinit on the minimum porice that could be choog-d for a good or survice, and this price would be above the Mooket equiliborium porier. Example \& diagram Suppase the goverinmont marnted to impase a minimum cuage above the equilibrium wage roate of p∗. A1 the equilibocium warge rout, thore is on equlibocium quantity of Q∗. By raisiney the wage ro्ete to the minimum erage of Pmin, it ereates an inerease in the quarnlity supplizd of Labour os weorkers ore mare welling to work, yet thore is a docrease in the quantity domandod of markors as Labour has bocome more expousive to froms. This soesutt in an excess subbly of morkons of the minimum waye rate, and we to coould eall then excess subbly unemployment. with reespret to the orieginal level of employmint, we can say that employmont has falles by the differene berwen Q∗ and QD. In economic Avecory, this in the orgumont pousented about the impart of a minimum veage.
Moximum price Alotpose Maximum poico ore an effective mereemum porieo vould vat a legal limit on the maximen pouec thoul could be chooged foor good \& sorvicu, and the poriec would be below the merket equilibrium priee. Example \& Diagram The commonly cited example in reat controol in housing mooret. If the goverment wernta to sit a ocont contowl in the wousing meorlat bolow the equliboium poriee of p2, then it will impart the amount of housing arrailable. The proiee Pmax Sst be low the equliboxium proies will resutt in a quartity Supblied of Qs and 5 a quonlity domand of Qd. At Pmex the quamity domand xecods twe quemtity Supplied, and they twre is a shoodage of housing. This oecoors becauss it in vess pooftable for landlorids to rent their lhouse and the lower poriees makes it moore attorartive for rentor.