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Quantitative Analysis of Price Ceilings and Price Floors: Finding Points definitions

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Terms in this set (15)

  • Price Ceiling
    A maximum allowable price set below equilibrium, causing increased demand and decreased supply in the market.
  • Price Floor
    A minimum allowable price set above equilibrium, resulting in altered market supply and demand.
  • Equilibrium Price
    The market price where quantity demanded equals quantity supplied, ensuring no shortage or surplus.
  • Equilibrium Quantity
    The market quantity where demand and supply are balanced, with no excess or deficit.
  • Quantity Demanded
    The total units consumers are willing to purchase at a specific price, influenced by price controls.
  • Quantity Supplied
    The total units producers are willing to offer at a specific price, affected by price regulations.
  • Shortage
    A market condition where demand exceeds supply, often caused by an effective price ceiling.
  • Surplus
    A market condition where supply exceeds demand, typically resulting from an effective price floor.
  • Demand Curve
    A graphical representation showing the relationship between price and quantity consumers desire.
  • Supply Curve
    A graphical representation illustrating the relationship between price and quantity producers offer.
  • Effective Price Ceiling
    A price restriction set below equilibrium, actively impacting market outcomes and creating shortages.
  • Effective Price Floor
    A price restriction set above equilibrium, actively influencing market outcomes and causing surpluses.
  • Rental Market
    A market context used to illustrate price controls, involving housing units and their prices.
  • Algebraic Equation
    A mathematical expression used to calculate market quantities under price controls.
  • Graph
    A visual tool for analyzing market equilibrium and effects of price ceilings or floors.