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What are sources of inefficiency when price floors are introduced
What are sources of inefficiency when price floors are introduced
What are sources of inefficiency when price floors are introduced
1) inefficient allocation of sales among sellers: those who would be willing to sell the good at the lowest price are not always those who actually manage to sell it
2) goods of inefficiently high quality are offered: sellers offer high- quality goods at a high price, even though buyers would prefer a lower quality at a lower price
3) deadweight loss from inefficiently low quantity
4) wasted resources
5) temptation to break law by selling below legal price
1) inefficient allocation of sales among sellers: those who would be willing to sell the good at the lowest price are not always those who actually manage to sell it
2) goods of inefficiently high quality are offered: sellers offer high- quality goods at a high price, even though buyers would prefer a lower quality at a lower price
3) deadweight loss from inefficiently low quantity
4) wasted resources
5) temptation to break law by selling below legal price
1) inefficient allocation of sales among sellers : those who would be willing to sell the good at the lowest price are not always those who actually manage to sell it 2) goods of inefficiently high quality are offered : sellers offer high- quality goods at a high price, even though buyers would prefer a lower quality at a lower price 3) deadweight loss frominefficiently low quantity 4) wasted resources 5) temptation to break law by sellingbelow legal price
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