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SUPPLY, DEMAND, AND GOVERNMENT POLICIES - Coggle Diagram
SUPPLY, DEMAND, AND GOVERNMENT POLICIES
Controls on price
Price ceiling
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-
Not binding price ceiling
Binding price ceiling
Binding price ceiling in long run
Evaluation
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Conclusion
Even though the price ceiling was motivated by a desire to help buyers, not all buyers benefit from the policy
Some buyers pay a lower price, although they
may have to wait in line to do so.
Other buyers even cannot buy the goods
anymore (because the quantity supplied,
available on the market, is too small).
Price floor
Binding price floor
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Not binding price floor
Tax
Tax imposed on buyer
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Tax imposed on seller :
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