AB/204 AB204 AB 204 UNIT 3 DISCUSSION 2

AB 204 UNIT 3 DISCUSSION 2

Unit 3: Supply and Demand and Market Intervention - Discussion

General Information:

To be an effective learning tool the Discussion Board topics require your active discussion of the topic with at least two of your classmates.

• First post made during, or before, Saturday.
• Posts on at least 3 different days.
• Responses to at least two other classmates.
• Substantive posts that stimulate further active discussion, posts that accurately reflects the learning, that are logical, and clearly presented with correct spelling, word usage, and grammar.
• To be counted as a substantial post, your main post to the Discussion topics should be at least 200 words per Discussion topic.

Supply, Demand, and Government Interventions in Markets

The Discussion topics include the market forces of supply and demand, supply and demand model, supply and demand curves, government failure, market failure, and the impacts of government policy of price controls on the interactions of supply and demand, prices and quantities in the market economy.

Respond to two of the following Discussion topics. Read Chapters 4 and 6, and remember to include references and links to the websites that you feel are important contributors to your posts (comments).

Topic 2

Without government intervention, the market price moves to the level at which the quantity supplied equals the quantity demanded through the interactions of supply and demand. But governments intervene in the market now and then to control prices.

1. What are the market inefficiencies the price controls measures such as price ceilings and price floors create? Why do price ceilings and price floors lead to productive and allocative (marketing) inefficiency?
2. Who benefits and who loses from government interventions in markets through price control methods known as price ceilings and price floors? Why price controls are used despite their well-known problems?