Price Control

1,334 views

Published on

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,334
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
24
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Price Control

  1. 1. Presented By Mayank Jain Sem 1, MBA 2010-12 DOMS IIT Roorkee
  2. 2. <ul><li>Governmental Impositions on the Prices Charged. </li></ul><ul><li>Determinant on how High or Low Prices can go. </li></ul>
  3. 3. <ul><li>Policymaker believe Market Price Unfair to Buyer or Seller </li></ul><ul><ul><li>Affordability of Staple Food </li></ul></ul><ul><ul><li>During Crisis Time </li></ul></ul><ul><li>An Attempt to alter the Equilibrium </li></ul>
  4. 4. <ul><li>Price Ceiling - Max Price that can be Charged for a Good. </li></ul><ul><li>Price Floor - Min Price that is Required to Pay for a Good </li></ul>
  5. 5. Equilibrium Price Ceiling D Quantity Price 3 2 200 4 S 100 D Quantity Price 3 2 200 300 4 S 100 Price Ceiling
  6. 6. Equilibrium Price Ceiling D Quantity Price 3 2 200 4 S 100 D Quantity Price 3 2 200 800 4 S 100 Shortage Price Ceiling
  7. 8. <ul><li>Missed opportunities thus Inefficient market economy </li></ul><ul><li>Inefficiency Introduced </li></ul><ul><ul><ul><li>Inefficient Allocation to Consumers </li></ul></ul></ul><ul><ul><ul><li>Wasted Resources </li></ul></ul></ul><ul><ul><ul><li>Inefficiently Low Quality </li></ul></ul></ul><ul><ul><ul><li>Black Markets </li></ul></ul></ul><ul><ul><ul><li>Supply side Pressure </li></ul></ul></ul><ul><ul><ul><li>Discrimination based on Supplier Bias </li></ul></ul></ul>
  8. 9. <ul><li>Price Floor is a minimum price buyer are required to pay for a good. </li></ul><ul><ul><li>The minimum wage is a legal floor on the wage rate. </li></ul></ul>
  9. 10. <ul><li>` </li></ul><ul><li>Equilibrium </li></ul><ul><li>Price floor </li></ul>D Quantity Price 3 2 200 4 S 100 D Quantity Price 3 2 200 600 4 S 100 Surplus Price Floor
  10. 11. <ul><li>Inefficient allocation of sales among Sellers </li></ul><ul><li>Wasted Resources </li></ul>
  11. 12. <ul><li>People Responds to Incentive </li></ul><ul><li>Market are Usually a Good Way to Organise Economic Activity </li></ul><ul><li>Government can Sometime Improve Market Outcome </li></ul>
  12. 13. <ul><li>Price control more often then Not Hurts Economy and Society if persisted for Long </li></ul>
  13. 14. Mayank Jain [email_address]

×