Episode 15: Price Floors and Price Ceilings

[20PARKES]

these videos really are fantastic for learning Economics! thank u

[extensad7]

awesome :D

[fluffyangelzx]

OMG thank you so much!! I finally understand what ceiling and floor is!! SUBSCRIBED!

[feelthemelody1]

you are soo amazing, u actualyy make sence!!!

[BailliveDeCaen]

OH MY GOD. I LOVE YOU!!!!

[WeEatBrainz]

Your lessons are fantastic! Your short 6 minute videos cover the same content as my textbook does in a chapter. I swear, 90% of my textbook is filler, they spend pages repeating content you have already learned.

[misspassiflora]

excellent explanation: there may be a chance that ill pass my eco exam after all. Thanks from down under.

[unrivaled37]

Thank you for posting these videos! They are helping me study for my AP Micro/Macro exam this coming thursdday!

[spirituelconnexion]

thank you



[GanjaGarb]

That was amazing. I loved it.

[BaBybLEnDer69]

your voice is like an angel compared to my eco teacher's.

[GeneralGrievousV]

Love your videos and love the drawings!!!!!!!! These are one of the best teaching videos I have come across with. :-) Thank You, Thank You, so much!!!!!

[corvettez06c]

Hi,

In Our book, there are 2 kind of Price Ceiling, and 2 other of Price Floor ....

And they are:

-Price Ceiling, And Price Ceiling is Binding "Binding Constraint"

-Price Floor, And Price Floor is Binding "Binding Constraint"

So, You already explained The Price Ceiling & Price Floor "Binding Constraint", and they effect the Market

About the other one "Price Ceiling & Price Floor", they don't effect the Market, they are ONLY a Limit Above the Equilibrium Price

Thanks A Lot for this Video btw :)

[mjmfoodie]

@corvettez06c All legally established maximum prices are price ceilings, but not all price ceilings are binding. If the government sets a maximum price of $5, but the market settles in at an equilibrium of $4, then the legal cap of $5 in no way interferes with where the market "wants" to be, and is a non-binding constraint.

(The same logic is true for price floors.)

[bobichina]

You are sooooo wonderful!!!! 

[LavaEagle]

Subscribed.

[jackngsc]

Hi do you have a lounder VOice Over for this version? It is fantastic!!!

[TheKrakatoa1]

my teacher's always shows ur video in our econ class.. MJMFOODIE FTW!!

[empireravenshadow5]

love your videos...so much more easy to understand than my god damn textbook

[SurferGuy407]

Very helpful guide, thanks a ton.

-student

[clarenceanthony]

thanks I'm now defiantly passing my econ test tomorrow

[clarenceanthony]

thanks I'm now defiantly passing my econ test tomorrow

[alexloterena27]

Thank you very much! It's for my report in school!

[mlmiles1]

This video was truly amazing! I am beyond impressed with the quality of your work! Thank you.

[clownnation]

Im watching your videos to prepare me for an upcoming CLEP test. Your videos hit on most of the chapters in the CLEP study guide. How well do you think your videos will help me on the test, assuming I didnt know much about Micro before, but I have alot of common sense and I test well?

[Chamathi7]

thanks a million, these videos are awesome, makes lifes very easier than reading the textbook!

[patthepuppy]

thank you for this video :)

it helped me to understand my new topic, consumer and producer surplus and price ceilings and floors.

plus the drawings are awesome, they're so cute!

[turkseturk]

great!

[thelocked16]

thnx :)

[timetraveler3797]

Are these video's made by you or someone else?

[mjmfoodie]

It's all me . . .

[checkyesgaby]

i am passing economics class because of you. thank you thank you thank you thank you!!!!!!!!!!

[mjmfoodie]

My pleasure.

[ulysseinvest]

On the image around 1:37, question:

What if the crowd "figures" it will move a greater portion of its wealth to just one product even though price are forced up? Example: say equilibrium for MILK is at 10$ with 10 people for demand. Gov sets floor at 20$ (which would normally drive need to 5). What if yet all 10 cut in other expenses (bread, oil, etc) to spend 20$ on MILK)... what happens then? The P/D curve has as many dimensions as the amount of products. Wrong - I think. But where. Help.

[mjmfoodie]

I think that the effect you are describing is captured by how elastic the demand for the product is -- in your example, people don't want to cut back on the milk, so even with a price increase they won't change buying habits. This type of unresponsiveness to price means the demand is inelastic (shown by a demand that is closer to vertical). It's theoretically possible, although showing a very extreme set of preferences, to react this way.

[ulysseinvest]

Need your help. Japan. I have a meeting this week. This Friday. Opponents are arguing that by having the government "control prices" on medical services (paid for by taxes - which renders the math a little more complex) Japan manages to "contain" costs with respect to Health Care expenditures. Help. It just can't be true. They say it prevents doctors from charging too much and drives prices down. My brain isn't big enough to find where the flaw is (but big enough to know there must be one).

[mjmfoodie]

Well, the most immediate fallout I can think of is that in a system where the doctors can't command as high a price, some providers may get out of the business (i.e., stop being doctors) because it isn't worth it anymore. It's akin to the situation in Las Vegas - not that there's a limit by the government, but with malpractice insurance so high, it's no longer financially viable to be in the OBGyn practice, and there are severe shortages in that field.

[ulysseinvest]

mjmfoodie, thanks for the reply.

Following-up. Assuming "some doctors" give up on their practice because it ain't worth it, a virtual equilibrium will be create where "enough" doctors think it's worth it - at which point the price will remain where it was set and patients will get their treatment within the budget... so instead of having excellent doctors for rich people - everyone will have access to average doctors. Assuming no "serious debt" is incured - what's the flaw? Is debt inevitable?

[mjmfoodie]

Another example might be the California electracity regulation debacle a few years, where the government attempted to regulate the market - but actually only regulated certain levels of the market, so that it was partially regulated. The result was huge shortages - the Rolling Blackouts - as electric companies would rather sell their product in other markets.

[fifiwin1]

Thanks so much, it's very useful!

[qwertyasdaz]

very, very helpful

[vinehanger]

great

[Sw00bs]

Thanks yo!

[blenderstyle]

This video nicely clarified price floors and price ceilings for me. Thank you.