Term
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Definition
| Legal restrictions on how high or low a market price may go. |
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Term
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Definition
| A maximum price sellers are allowed to charge for a good or service. |
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Term
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Definition
| A minimum price buyers are required to pay for a good or service. |
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Term
| inefficient allocation of resources |
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Definition
| People who want the good badly and are willing to pay a high price don't get it, and those who care relatively little about the good and are only willing to pay a relatively low price do get it. |
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Term
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Definition
| People expend money, effort, and time to cope with the shortages caused by the price ceiling. |
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Term
| inefficiently low quality |
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Definition
| Sellers offer low quality goods at a low price even though buyers would prefer a higher quality at a higher price. |
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Term
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Definition
| A market in which goods or services are bought and sold illegally- either because it is illegal to sell them at all or because the prices charged are legally prohibited by a price ceiling. |
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Term
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Definition
| A legal floor on the wage rate, which is the market price of labor. |
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