This section of the IB syllabus requires you to understand the following:

  • Maximum price: causes and consequences
  • Minimum price: causes and consequences
  • Price support/buffer stock schemes

Before learning about these concepts, it is first worth being sure of the following concepts:

  • Consumer Surplus
  • Producer Surplus

The rest of this post gives you links to online resources to help you become an expert in these concepts. Make sure you consult your text book(s) too, to provide further understanding.

Consumer and Producer Surplus

consumer surplus by pajholden

producer surplus by pajholden

http://welkerswikinomics.wetpaint.com/page/Consumer+and+Producer+Surplus

Maximum prices and Minimum prices : causes and consequences

http://tutor2u.net/economics/revision-notes/as-marketfailure-maximum-prices.html (although you may not understand all of this yet – the bits on elasticity for example)

http://tutor2u.net/economics/content/topics/marketsinaction/black_markets.htm

http://www.fmhs.auckland.ac.nz/faculty/ltu/toni_ashton/supply-demand.swf [sections 7 and 8]

 

http://welkerswikinomics.com/blog/2010/09/29/ah-ha-so-that-explains-the-long-lines-at-the-petrol-stations-around-shanghai-this-weekend/

 http://welkerswikinomics.wetpaint.com/page/Application%3A+Government-Set+Prices

Price support/buffer stock schemes