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Part V: Part V: Law of Diminishing Marginal Law of Diminishing Marginal Utility Utility Price Ceilings & Price Floors Price Ceilings & Price Floors Blackmarkets Blackmarkets ECONOMICS What does it mean to me?
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Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Jan 13, 2016

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Page 1: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Part V:Part V:•Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility•Price Ceilings & Price FloorsPrice Ceilings & Price Floors•BlackmarketsBlackmarkets

ECONOMICSWhat does it mean to me?

Page 2: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

The LAW of The LAW of DIMINISHING DIMINISHING MARGINAL MARGINAL

UTILITYUTILITY

Page 3: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

In what kind In what kind of machines of machines

are are newspapers newspapers

sold?sold?

Page 4: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Why don’t we sell Coca-Why don’t we sell Coca-Cola in machines similar Cola in machines similar to those we use to sell to those we use to sell

newspapers?newspapers?

Page 5: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

The value of a 2nd newspaper diminishes fast…..unlike the value of Coca-Cola.

People use this information to make appropriate machines.

REASON:

Page 6: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

This is called the

LAW of DIMINISHING LAW of DIMINISHING MARGINAL UTILITYMARGINAL UTILITY

The value given to the amount of gratification derived from something will decrease with each

additional unit of that item.

TOTAL UTILITY is the total amount of satisfaction a person gets from consuming a specific

quantity (such as 20 units).

Page 7: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

This law operates ALWAYS with respect to time.

How much do you make?

Week? Month? Year?

-----> $1000 ???

The period of time in which you make $1000 will make a difference in the amount of money you

have to spend.

Day?

Page 8: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

What day would be most likely for newspapers be stolen from the machines?

The answer is: Sunday

because that is coupon day.

However, people can still get TOO MANY coupons, so the law still applies.

Page 9: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

The relationship between an individual’s consumption bundle and the total amount of utility is called the UTILITY FUNCTION.

The utility function differs for each person.

We will measure Utility in hypothetical units called UTILS.

Page 10: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Candy

0

1

2

3

4

5

6

7

Total Utility

0

10

18

24

28

30

30

28

Marginal Utility

10

8

6

4

2

0

-2

30

20

10

0 1 2 3 4 5 6 7

Total Utility

Units consumed

**As more of a product is consumed, total utility increases at a diminishing rate, reaches a

maximum, and then declines.

Page 11: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Candy

0

1

2

3

4

5

6

7

Total Utility

0

10

18

24

28

30

30

28

Marginal Utility

10

8

6

4

2

0

-2

10

8

6

4

2

0 1 2 3 4 5 6 7

Marginal Utility

Units consumed

** Marginal utility reflects the change in total utility.

Page 12: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

10

8

6

4

2

0 1 2 3 4 5 6 7

Marginal Utility

Units consumed

30

20

10

0 1 2 3 4 5 6 7

Total Utility

Units consumed

1) When MU is zero in graph b, total utility in graph a is:

a) also zero b) neither rising nor falling c) negative

d) rising, but at a declining rate

Page 13: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

10

8

6

4

2

0 1 2 3 4 5 6 7

Marginal Utility

Units consumed

30

20

10

0 1 2 3 4 5 6 7

Total Utility

Units consumed2) Suppose the person represented here experienced a diminished taste for candy.

As a result:

a) TU curve would get steeper b) MU curve gets flatter

c) TU & MU would shift downward d) MU curve (not TU) would collapse to horizontal

axis

Page 14: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Debbie makes $20 and cokes are $2 and chips are $4 a pound.

How does Debbie decide HOW MUCH to consume based on the fact that the more cokes she consumes, the fewer

chips she can purchase?

Page 15: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

The answer is to determine the Marginal Utility per dollarMarginal Utility per dollar.

The equation we will use is:

MUx Muy

Px Py

____ = ____

Page 16: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Qcoke Ucoke MUper/coke MU$

0 0

1 15

2 25

3 31

4 34

5 36

Calculate Debbie’s MU per dollar for coke

The price per coke is $4

15

10

6

3

2

3.75

2.5

1.5

.75

.5

Page 17: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Qcoke Ucoke MUper/coke MU$

0 0

1 15

2 25

3 31

4 34

5 36

Calculate Debbie’s MU per dollar for Chips/pound.

The price per pound of chips is $2.

15

10

6

3

2

Qcoke Ucoke MUper/coke MU$

0 0

1 11.5

2 21.4

3 29.8

4 36.8

5 42.5

6 47

7 50.5

8 53.2

9 55.2

10 56.7

11.5

9.9

8.4

7

5.7

4.5

3.5

2.7

2

1.5

3.75

2.5

1.5

.75

.5

5.75

4.95

4.2

3,5

2.85

2.25

1.75

1.35

1.00

.75

Page 18: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Qcoke Ucoke MUper/coke MU$

0 0

1 15

2 25

3 31

4 34

5 36

Calculate Debbie’s MU per dollar for coke

Debbie’s optimal consumption is 2 cokes and 6 pounds of chips because

she consumes these amounts, her MU per dollar

is 2.

15

10

6

3

2

Qcoke Ucoke MUper/coke MU$

0 0

1 11.5

2 21.4

3 29.8

4 36.8

5 42.5

6 47

7 50.5

8 53.2

9 55.2

10 56.7

11.5

9.9

8.4

7

5.7

4.5

3.5

2.7

2

1.5

3.75

2.5

1.5

.75

.5

5.75

4.95

4.2

3,5

2.85

2.25

1.75

1.35

1.00

.75

Page 19: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Optimum Consumption and the Optimum Consumption and the Budget LineBudget Line

10

8

6

4

2

01 2 3 4 5 6 Quantity

of Coke

Quantity of chips (pounds)

Assume that Debbie earns $20. Coke is $4 a can and chips are $2 a pound.

The budget line represents all the possible combinations of coke

and chips Debbie can purchase.

If Debbie wants to consume 1 more coke, she must give up 2

pounds of chips.

NOTE: (Slope of the line is -2)

Page 20: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

10

8

6

4

2

01 2 3 4 5 6 Quantity

of Coke

Quantity of chips (pounds)

Changes in income shifts the budget line.

Page 21: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Now, let’s apply the Law of Marginal UtilityLaw of Marginal Utility

to artificial pricing systems such as those applied by

governments.

Page 22: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

What happens when prices are “fixed” by

the government?

Let’s look at a graph which shows the average

consumption of beer in the United States.

Page 23: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

PRICE CEILINGS & PRICE FLOORS

(Consumer Surplus & Producer Surplus)

Page 24: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$4

$3

$2

$1

Beers per week

0 1 2 3 4 5 6 7

S

D

E

Ge

In this example, the average beers consumed per week is 6

at an average price of $2.50.

Page 25: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$4

$3

$2

$1

Beers per week0 1 2 3 4 5 6 7

S

D

E

This chart illustrates the effects upon people if they were forced to go from

Ge to zero.

Ge

You might be You might be willing to pay willing to pay $4 for your first $4 for your first beer, but price beer, but price is $2.50 …..now is $2.50 …..now you are $1.50 you are $1.50 better off. This better off. This is called is called CONSUMER CONSUMER SURPLUS.SURPLUS.

Page 26: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

The 9th beer is worth to people

what it is worth to people.

It is different for everybody.

Page 27: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$4

$3

$2

$1

Beers per week

0 1 2 3 4 5 6 7

S

D

E

Ge

From the From the suppliers’ suppliers’ standpoint, standpoint, they they could could supply at a supply at a lower price but lower price but they they CAN CAN get get more. This is more. This is called called PRODUCER PRODUCER SURPLUS.SURPLUS.

Page 28: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$4

$3

$2

$1

Beers per week

0 1 2 3 4 5 6 7

S

D

E

Ge

The The colored colored area is the area is the total valuetotal value to society to society of the cost of the cost of 6 beers.of 6 beers.

Consumer Surplus

Producer Surplus

Page 29: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$4

$3

$2

$1

Beers per week0 1 2 3 4 5 6 7

S

D

E

Ge

Four beers is Four beers is not enough not enough (too little, (too little,

inefficient) inefficient) ….This is ….This is

called called DEADWEIGHT DEADWEIGHT

loss.loss.

What if government mandate limited the What if government mandate limited the maximum number of beers one could drink to 4 maximum number of beers one could drink to 4 per week?per week?

Government Mandated Supply

Page 30: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$4

$3

$2

$1

Beers per week

0 1 2 3 4 5 6 7

S

D

E

Ge

What if government mandate limited What if government mandate limited the maximum price of a beer to $1.00?the maximum price of a beer to $1.00?

Consumers would want to buy more beer.

10

However, suppliers would not

want to produce as much beer.

Page 31: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$4

$3

$2

$1

Beers per week0 1 2 3 4 5 6 7

S

D

E

Ge

If If government government limited the limited the maximum maximum price of a price of a

beer to $1.00, beer to $1.00, it would it would create a create a

shortage.shortage.

shortage

Producers will not want to produce for low prices.

Page 32: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

The legal maximum price that can be charged is called a PRICE CEILINGPRICE CEILING. A legal minimum price that can be charged is called a PRICE PRICE FLOORFLOOR. Price ceilings and

floors keep markets from reaching equilibriumequilibrium..

Page 33: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Politically popular ideas include:

--$ minimums on inputs (wages).

--$ maximums on outputs (prices).

When POLITICS vs. POLITICS vs. ECONOMICS => ECONOMICS => Politics always Politics always

winswins

Page 34: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$4

$3

$2

$1

Beers per week0 1 2 3 4 5 6 7

S

D

E

Ge

The The government government mandating mandating

the the maximum maximum price of a price of a

beer is beer is called a called a PRICE PRICE

CEILINGCEILING..

shortage

A price ceiling keeps the market from reaching equilibrium.

Page 35: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$4

$3

$2

$1

Beers per week0 1 2 3 4 5 6 7

S

D

E

Ge

shortage

The shortage created from the price ceiling will result in increased demand.

X

Page 36: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

The increased demand and a willingness to pay higher prices will result in a BLACK MARKET for

beer.

Page 37: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$5

$4

$3

$2

$1

Labor0 1 2 3 4 5 6 7

S

D

E

Ge

When the government mandates a the When the government mandates a the minimum price of something, it is called minimum price of something, it is called a a PRICE FLOORPRICE FLOOR..

The minimum wage is an example of a price floor.

Page 38: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$5

$4

$3

$2

$1

Labor0 1 2 3 4 5 6 7

S

D

E

Ge

The minimum wage increases the number of people who want to work (supply of labor). . .

. . . And decreases the number of businesses who want to hire (demand for labor)

Creating a SURPLUS of labor.

SURPLUS

Page 39: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

A price floor stops the market from reaching equilibrium and creates a surplus.

A price ceiling stops the market from reaching equilibrium and creates a shortage.

CONCLUSION:

Page 40: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Typically, the government jumps

in during a surplus, buys the surplus….

and the surplus rots.and the surplus rots.

Page 41: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Using economic principles and the impact of government

mandate, why was the 18th Amendment to the U.S.

Constitution considered “the great experiment that failed?”

QUESTION 1:

Page 42: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$5

$4

$3

$2

$1

Beers per week0 1 2 3 4 5 6 7

S

D

E

Ge

ANSWER: The 18th Amendment created a shortage of alcohol for consumption

When the price of alcohol increased under black market conditions, this initiated the development of the syndicate and the notoriety of such underworld figures as Al Capone.

Page 43: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Using economic principles, explain the impact of

government mandates on the supply and demand of the illegal marijuana market.

QUESTION 2:

Page 44: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$300

$250

$200

$150

$100

$ 50

Marijuana use0 1 2 3 4 5 6 7

S

D

E

Ge

ANSWER: In 1937, the government reduced the availability of marijuana to zero by making it illegal.

Because people have been willing to pay a high price for the product, black market conditions have existed since the shortage was created.

This created a shortage in the market.

Page 45: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

In 1973, President Nixon froze gasoline prices after the OPEC cartel created a

shortage in the United States. What impact did this have on the market economy at that

time?

QUESTION 3:

Page 46: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$4

$3

$2

$1

Gallons of Gas0 1 2 3 4 5 6 7

S

D

E

Ge

ANSWER: ANSWER: President President Nixon initiated Nixon initiated a price ceiling a price ceiling of $1.60.of $1.60.

shortage

REMEMBER: Producers will not want to produce for low prices.

Consequently, a Consequently, a shortage existed shortage existed because gas because gas companies were companies were taking a loss. taking a loss. This resulted in This resulted in long lines and long lines and gas stations gas stations running out of running out of fuel.fuel.

Page 47: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Using economic principles and the impact of government mandate, explain what would happen if cigarette smoking

were made illegal.

What would be the opportunity cost of making cigarettes

illegal?

QUESTION 4:

Page 48: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$10

$8

$6

$4

$2

Cigarette use0 1 2 3 4 5 6 7

S

D

E

Ge

ANSWER: The government would reduce the supply of cigarettes to zero by making it illegal.

Because some people will be willing to pay a high price for the product, black market conditions will exist and the price of cigarettes will increase.

This will create a shortage in the market.

Page 49: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

ANSWER: The opportunity costs would include:

•Lower environmental costs

•Cleaner air

•Lower costs for health care

•Healthier population

•Higher unemployment for lost jobs

Page 50: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

Many experts contend that the Food and Drug Administration (FDA) directly creates the high price of prescription drugs. Do you agree? Why or why not? Explain

your answer.

Question 5:

Page 51: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$100

$80

$60

$40

$20

Drug use0 1 2 3 4 5 6 7

S

D

E

Ge

ANSWER: The FDA, a government regulatory agency, reduces the supply of certain drugs by making them unavailable to certain people through the use of prescriptions.

Because doctors prescribe drugs for illness and the patient requests good health, they pay the higher price created by the government.

This results in a limited market.

Page 52: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

In May 2001, President Bush visited with Governor Gray of California to discuss the

energy crisis in that state. It will take 10 years to build the power plants necessary to provide

the electricity needed to support the population and costs will skyrocket as demand exceeds supply. Governor Gray is requesting

that President Bush place a federal price ceiling on the cost of energy. Why did

President Bush refuse?

Question 6:

Page 53: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

$D

$C

$B

$A

Kilowatts0 a b c d e f g

S

D

E

Ge

ANSWER: ANSWER: President Bush realizes that a price ceiling will result in a shortage of electricity.

shortage

REMEMBER: Producers will not want to produce for low prices.

Limiting the price Limiting the price that power that power companies can companies can charge for charge for electricity will cause electricity will cause them to lose money, them to lose money, not produce not produce efficiently, and efficiently, and result in a shortage result in a shortage of power.of power.

Page 54: Part V: Law of Diminishing Marginal UtilityLaw of Diminishing Marginal Utility Price Ceilings & Price FloorsPrice Ceilings & Price Floors BlackmarketsBlackmarkets.

THE END

Compiled by Virginia Meachum Economics Teacher, Coral Springs High

School, Florida

Sources:

Economics, by Krugman, Wells.

Economics, by McConnell, Brue

Economics, by Mankiw