Tutorial 4: Elasticity (cont.)
The Impact of Government Price-setting Policies
Under Different Price Elasticities
At the end of Tutorial 3
we saw that the government, on occasion, set price floors
or price ceilings so that this regulated price was "fair"
to one or more affected groups. We also noted
that the government often altered a firm's costs by granting
a subsidy or imposing an exise tax. In this tutorial we
will discover that the size of the impact of these policies
depends on price elasticity of demand or supply.
Stay tuned for more...
| Now it's time to "do
the thing".
Click on the following link to
download the Price
Elasticity Workbook. Work through Template
Questions 8 - 9 to improve your understanding
of the impact of government price-setting policies
on a market under different price elasticities.
Return here when you have finished.
Need help
downloading the Excel file? |
|
Now we turn our attention to the economic theory of consumer
choice.
Next: Tutorial 5 - Consumer
Choice 
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