In economics, a price support may be either a subsidy or a price control, both with the intended effect of keeping the market price of a good higher than the competitive equilibrium level.
In the case of a price control, a price support is the minimum legal price a seller may charge, typically placed above equilibrium. It is the support of certain price levels at or above market values by the government.
A price support scheme can also be an agreement set in order by the government, where the government agrees to purchase the surplus of at a minimum price. For example, if a price floor were set in place for agricultural wheat commodities, the government would be forced to purchase the resulting surplus from the wheat farmers (thereby subsidizing the farmers) and store or otherwise dispose of it.
Short term effects of price supports
Example
If you were to consider a hypothetical market in which supply and demand are such that the equilibrium price and quantity are $5 and 500 units, respectively. The government then institutes a price floor at $6 per unit.
This video discusses the effect of a price support. A price support consists of a price floor and a guarantee from the government to purchase any excess supply created by the price floor. A price support increases the producer surplus, but results in a net deadweight loss because the cost to the government in purchasing the excess supply outweighs the gain to producers. Thus, a price support reduces the social surplus.—
Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education freely available to the world.
—
SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS:
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• A 75-...
published: 26 Feb 2017
Farm programs - Price Supports
For www.inflateyourmind.com by John Bouman farm programs -Price Supports
published: 22 Jul 2016
Price Ceilings and Floors- Micro Topic 2.8
New video for this topic: https://youtu.be/eE_FYK2FlnQ
In this video I explain what happens when the government controls market prices. Price ceilings are a legal maximum price and price floors are a minimum legal price. Make sure that you can draw each of them on a demand and supply graph and identify if there is a shortage or a surplus. Keep in mind that your teacher may use the word "binding" to describe the situation where the price control has an effect on the market.
Need help? Check out the Ultimate Review Packet for FREE: https://www.acdcecon.com/review-packet
published: 27 Sep 2014
Price Controls, Subsidies, and the Risks of Good Intentions: Crash Course Economics #20
So, during times of inflation or deflation, why doesn't the government just set prices? It sounds reasonable, but price ceilings or floors just don't work. Adriene and Jacob explain why. Subsidies, however, are a little different, and sometimes they even work. We'll also explain that. Today you'll learn about stuff like price controls, deadweight loss, subsidies, and efficiency.
Crash Course is on Patreon! You can support us directly by signing up at http://www.patreon.com/crashcourse
Thanks to the following Patrons for their generous monthly contributions that help keep Crash Course free for everyone forever:
Mark, Eric Kitchen, Jessica Wode, Jeffrey Thompson, Steve Marshall, Moritz Schmidt, Robert Kunz, Tim Curwick, Jason A Saslow, SR Foxley, Elliot Beter, Jacob Ash, Christian, Jan Sc...
published: 13 Jan 2016
What are Support and Resistance?
The basic building blocks of trading. The first signs of where to buy and sell. Support and Resistance are the two most widely used indications of where to open and close a trade. David is on hand to share his wisdom about them and show you some tips and tricks on how to get the most out of them.
Visit us at https://trading212.com
Download our free mobile apps for iOS or Android:
https://trading212.com/GetTheApp
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#Investing #Trading #Equiti...
published: 08 Nov 2017
The Effect of a Price Floor
This video discusses the effect of a price floor. When the government says the price of a good or service cannot go below a certain threshold, we call this threshold a price floor. If the price floor is higher than the equilibrium price, this will result in excess supply of the good or service. This occurs because, at the price floor, consumers demand less of the good than producers are willing to supply. This results in a deadweight loss, which is a reduction in the social surplus.
—
Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD.
Edspira’s mission is to make a high-quality business education accessible to all people.
—
SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS & OTHER FREE GUIDES
* http://eepurl.com/dIaa5z
—
MICHAEL...
published: 26 Feb 2017
MSP; Minimum Support Price: No magic bullet to end farmer woes
MSP or Minimum Support price is being used by governments to ensure farmers get a profit on what they produce. But MSPs actually create more problems than they solve and are directly responsible for plethora of problems the farmer seems to be forever facing. Bisbo explains in detail how fixed prices actually are bad economics. Make sure to see the limerick at the end!
Sources:
------------
Mint
Satyan Bera & Utpal Bhaskar; July 19, 2013
Himanshu; July 17, 2018
Mint; Siraj Hussain; July 9, 2018
Economic TImes
Madhvi Sally; July 13; 2018
Joel Rebello; July 6; 2018
Times of India
Swaminathan Anklesaria Aiyar; July 8, 2018
Times of India, Jan 2108
Mumbai Mirror
Ajit Ranade; July 7, 2018
Bisbo's previous story on Farmer loan:
----------------------------------------------------
It's no fu...
This video discusses the effect of a price support. A price support consists of a price floor and a guarantee from the government to purchase any excess supply...
This video discusses the effect of a price support. A price support consists of a price floor and a guarantee from the government to purchase any excess supply created by the price floor. A price support increases the producer surplus, but results in a net deadweight loss because the cost to the government in purchasing the excess supply outweighs the gain to producers. Thus, a price support reduces the social surplus.—
Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education freely available to the world.
—
SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS:
• A 23-PAGE GUIDE TO MANAGERIAL ACCOUNTING
• A 44-PAGE GUIDE TO U.S. TAXATION
• A 75-PAGE GUIDE TO FINANCIAL STATEMENT ANALYSIS
• MANY MORE FREE PDF GUIDES AND SPREADSHEETS
* http://eepurl.com/dIaa5z
—
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*https://www.patreon.com/prof_mclaughlin
—
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—
ABOUT EDSPIRA AND ITS CREATOR
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* https://michaelmclaughlin.com
This video discusses the effect of a price support. A price support consists of a price floor and a guarantee from the government to purchase any excess supply created by the price floor. A price support increases the producer surplus, but results in a net deadweight loss because the cost to the government in purchasing the excess supply outweighs the gain to producers. Thus, a price support reduces the social surplus.—
Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education freely available to the world.
—
SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS:
• A 23-PAGE GUIDE TO MANAGERIAL ACCOUNTING
• A 44-PAGE GUIDE TO U.S. TAXATION
• A 75-PAGE GUIDE TO FINANCIAL STATEMENT ANALYSIS
• MANY MORE FREE PDF GUIDES AND SPREADSHEETS
* http://eepurl.com/dIaa5z
—
SUPPORT EDSPIRA ON PATREON
*https://www.patreon.com/prof_mclaughlin
—
GET CERTIFIED IN FINANCIAL STATEMENT ANALYSIS, IFRS 16, AND ASSET-LIABILITY MANAGEMENT
* https://edspira.thinkific.com
—
LISTEN TO THE SCHEME PODCAST
* Apple Podcasts: https://podcasts.apple.com/us/podcast/scheme/id1522352725
* Spotify: https://open.spotify.com/show/4WaNTqVFxISHlgcSWNT1kc
* Website: https://www.edspira.com/podcast-2/
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ACCESS INDEX OF VIDEOS
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CONNECT WITH MICHAEL
* Twitter: https://www.twitter.com/Prof_McLaughlin
* LinkedIn: https://www.linkedin.com/in/prof-michael-mclaughlin
—
ABOUT EDSPIRA AND ITS CREATOR
* https://www.edspira.com/about/
* https://michaelmclaughlin.com
New video for this topic: https://youtu.be/eE_FYK2FlnQ
In this video I explain what happens when the government controls market prices. Price ceilings are a leg...
New video for this topic: https://youtu.be/eE_FYK2FlnQ
In this video I explain what happens when the government controls market prices. Price ceilings are a legal maximum price and price floors are a minimum legal price. Make sure that you can draw each of them on a demand and supply graph and identify if there is a shortage or a surplus. Keep in mind that your teacher may use the word "binding" to describe the situation where the price control has an effect on the market.
Need help? Check out the Ultimate Review Packet for FREE: https://www.acdcecon.com/review-packet
New video for this topic: https://youtu.be/eE_FYK2FlnQ
In this video I explain what happens when the government controls market prices. Price ceilings are a legal maximum price and price floors are a minimum legal price. Make sure that you can draw each of them on a demand and supply graph and identify if there is a shortage or a surplus. Keep in mind that your teacher may use the word "binding" to describe the situation where the price control has an effect on the market.
Need help? Check out the Ultimate Review Packet for FREE: https://www.acdcecon.com/review-packet
So, during times of inflation or deflation, why doesn't the government just set prices? It sounds reasonable, but price ceilings or floors just don't work. Adri...
So, during times of inflation or deflation, why doesn't the government just set prices? It sounds reasonable, but price ceilings or floors just don't work. Adriene and Jacob explain why. Subsidies, however, are a little different, and sometimes they even work. We'll also explain that. Today you'll learn about stuff like price controls, deadweight loss, subsidies, and efficiency.
Crash Course is on Patreon! You can support us directly by signing up at http://www.patreon.com/crashcourse
Thanks to the following Patrons for their generous monthly contributions that help keep Crash Course free for everyone forever:
Mark, Eric Kitchen, Jessica Wode, Jeffrey Thompson, Steve Marshall, Moritz Schmidt, Robert Kunz, Tim Curwick, Jason A Saslow, SR Foxley, Elliot Beter, Jacob Ash, Christian, Jan Schmid, Jirat, Christy Huddleston, Daniel Baulig, Chris Peters, Anna-Ester Volozh, Ian Dundore, Caleb Weeks
--
Want to find Crash Course elsewhere on the internet?
Facebook - http://www.facebook.com/YouTubeCrashCourse
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Tumblr - http://thecrashcourse.tumblr.com
Support Crash Course on Patreon: http://patreon.com/crashcourse
CC Kids: http://www.youtube.com/crashcoursekids
So, during times of inflation or deflation, why doesn't the government just set prices? It sounds reasonable, but price ceilings or floors just don't work. Adriene and Jacob explain why. Subsidies, however, are a little different, and sometimes they even work. We'll also explain that. Today you'll learn about stuff like price controls, deadweight loss, subsidies, and efficiency.
Crash Course is on Patreon! You can support us directly by signing up at http://www.patreon.com/crashcourse
Thanks to the following Patrons for their generous monthly contributions that help keep Crash Course free for everyone forever:
Mark, Eric Kitchen, Jessica Wode, Jeffrey Thompson, Steve Marshall, Moritz Schmidt, Robert Kunz, Tim Curwick, Jason A Saslow, SR Foxley, Elliot Beter, Jacob Ash, Christian, Jan Schmid, Jirat, Christy Huddleston, Daniel Baulig, Chris Peters, Anna-Ester Volozh, Ian Dundore, Caleb Weeks
--
Want to find Crash Course elsewhere on the internet?
Facebook - http://www.facebook.com/YouTubeCrashCourse
Twitter - http://www.twitter.com/TheCrashCourse
Tumblr - http://thecrashcourse.tumblr.com
Support Crash Course on Patreon: http://patreon.com/crashcourse
CC Kids: http://www.youtube.com/crashcoursekids
The basic building blocks of trading. The first signs of where to buy and sell. Support and Resistance are the two most widely used indications of where to open...
The basic building blocks of trading. The first signs of where to buy and sell. Support and Resistance are the two most widely used indications of where to open and close a trade. David is on hand to share his wisdom about them and show you some tips and tricks on how to get the most out of them.
Visit us at https://trading212.com
Download our free mobile apps for iOS or Android:
https://trading212.com/GetTheApp
------------------------------------------------------------------------
📲 Trading 212 on Social Media:
https://twitter.com/Trading212
https://www.facebook.com/Trading212
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------------------------------------------------------------------------
#Investing #Trading #Equities #trading212
The information contained within the video was correct at the time of recording but may have since changed.
At Trading 212 we provide an execution only service. This video should not be construed as investment advice. Investments can fall and rise. Capital at risk. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The basic building blocks of trading. The first signs of where to buy and sell. Support and Resistance are the two most widely used indications of where to open and close a trade. David is on hand to share his wisdom about them and show you some tips and tricks on how to get the most out of them.
Visit us at https://trading212.com
Download our free mobile apps for iOS or Android:
https://trading212.com/GetTheApp
------------------------------------------------------------------------
📲 Trading 212 on Social Media:
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https://www.instagram.com/trading212
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https://community.trading212.com
------------------------------------------------------------------------
#Investing #Trading #Equities #trading212
The information contained within the video was correct at the time of recording but may have since changed.
At Trading 212 we provide an execution only service. This video should not be construed as investment advice. Investments can fall and rise. Capital at risk. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
This video discusses the effect of a price floor. When the government says the price of a good or service cannot go below a certain threshold, we call this thr...
This video discusses the effect of a price floor. When the government says the price of a good or service cannot go below a certain threshold, we call this threshold a price floor. If the price floor is higher than the equilibrium price, this will result in excess supply of the good or service. This occurs because, at the price floor, consumers demand less of the good than producers are willing to supply. This results in a deadweight loss, which is a reduction in the social surplus.
—
Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD.
Edspira’s mission is to make a high-quality business education accessible to all people.
—
SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS & OTHER FREE GUIDES
* http://eepurl.com/dIaa5z
—
MICHAEL’S STORY
* https://www.edspira.com/about/
—
LISTEN TO THE SCHEME PODCAST
* Apple Podcasts: https://podcasts.apple.com/us/podcast/scheme/id1522352725
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—
CONNECT WITH EDSPIRA
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*TikTok: https://www.tiktok.com/@prof_mclaughlin
—
HIRE MCLAUGHLIN CPA
* Website: http://www.MichaelMcLaughlin.com/hire-me
This video discusses the effect of a price floor. When the government says the price of a good or service cannot go below a certain threshold, we call this threshold a price floor. If the price floor is higher than the equilibrium price, this will result in excess supply of the good or service. This occurs because, at the price floor, consumers demand less of the good than producers are willing to supply. This results in a deadweight loss, which is a reduction in the social surplus.
—
Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD.
Edspira’s mission is to make a high-quality business education accessible to all people.
—
SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS & OTHER FREE GUIDES
* http://eepurl.com/dIaa5z
—
MICHAEL’S STORY
* https://www.edspira.com/about/
—
LISTEN TO THE SCHEME PODCAST
* Apple Podcasts: https://podcasts.apple.com/us/podcast/scheme/id1522352725
* Spotify: https://open.spotify.com/show/4WaNTqVFxISHlgcSWNT1kc
* Website: https://www.edspira.com/podcast-2/
—
CONNECT WITH EDSPIRA
* Website: https://www.edspira.com
* Instagram: https://www.instagram.com/edspiradotcom
* LinkedIn: https://www.linkedin.com/company/edspira
* Facebook: https://www.facebook.com/Edspira
* Reddit: https://www.reddit.com/r/edspira
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—
CONNECT WITH MICHAEL
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* Instagram: https://www.instagram.com/prof_mclaughlin
* Snapchat: https://www.snapchat.com/add/prof_mclaughlin
*TikTok: https://www.tiktok.com/@prof_mclaughlin
—
HIRE MCLAUGHLIN CPA
* Website: http://www.MichaelMcLaughlin.com/hire-me
MSP or Minimum Support price is being used by governments to ensure farmers get a profit on what they produce. But MSPs actually create more problems than they ...
MSP or Minimum Support price is being used by governments to ensure farmers get a profit on what they produce. But MSPs actually create more problems than they solve and are directly responsible for plethora of problems the farmer seems to be forever facing. Bisbo explains in detail how fixed prices actually are bad economics. Make sure to see the limerick at the end!
Sources:
------------
Mint
Satyan Bera & Utpal Bhaskar; July 19, 2013
Himanshu; July 17, 2018
Mint; Siraj Hussain; July 9, 2018
Economic TImes
Madhvi Sally; July 13; 2018
Joel Rebello; July 6; 2018
Times of India
Swaminathan Anklesaria Aiyar; July 8, 2018
Times of India, Jan 2108
Mumbai Mirror
Ajit Ranade; July 7, 2018
Bisbo's previous story on Farmer loan:
----------------------------------------------------
It's no fun being a farmer in India: https://youtu.be/cH_COzDSSUE
Bisbo's other related stories:
--------------------------------------
Tuticorin's Sterlite copper plant; was politics responsible for the violence? https://youtu.be/ptSHc7W7DQo
The Ratnagiri oil refinery in collaboration with Saudi Aramco, will be largest in the world: https://youtu.be/9Lh3uLPZ94k
Why protectionism is bad for India: https://youtu.be/QXoUVwvHtEc
Oil prices continue to rise in 2018: https://youtu.be/Gs7F5dhjOUY
India’s beef ban. How a badly implemented ban will pull down ‘India Shining’: https://youtu.be/N3XEeFCN1IQ
Bisbo's Limerick:
---------------------
Don't forget to watch Bisbo's Limerick at the end of each video, that neatly sums up the topic.
Follow Bisbo on Twitter:
--------------------------------
@GoBisbo
MSP or Minimum Support price is being used by governments to ensure farmers get a profit on what they produce. But MSPs actually create more problems than they solve and are directly responsible for plethora of problems the farmer seems to be forever facing. Bisbo explains in detail how fixed prices actually are bad economics. Make sure to see the limerick at the end!
Sources:
------------
Mint
Satyan Bera & Utpal Bhaskar; July 19, 2013
Himanshu; July 17, 2018
Mint; Siraj Hussain; July 9, 2018
Economic TImes
Madhvi Sally; July 13; 2018
Joel Rebello; July 6; 2018
Times of India
Swaminathan Anklesaria Aiyar; July 8, 2018
Times of India, Jan 2108
Mumbai Mirror
Ajit Ranade; July 7, 2018
Bisbo's previous story on Farmer loan:
----------------------------------------------------
It's no fun being a farmer in India: https://youtu.be/cH_COzDSSUE
Bisbo's other related stories:
--------------------------------------
Tuticorin's Sterlite copper plant; was politics responsible for the violence? https://youtu.be/ptSHc7W7DQo
The Ratnagiri oil refinery in collaboration with Saudi Aramco, will be largest in the world: https://youtu.be/9Lh3uLPZ94k
Why protectionism is bad for India: https://youtu.be/QXoUVwvHtEc
Oil prices continue to rise in 2018: https://youtu.be/Gs7F5dhjOUY
India’s beef ban. How a badly implemented ban will pull down ‘India Shining’: https://youtu.be/N3XEeFCN1IQ
Bisbo's Limerick:
---------------------
Don't forget to watch Bisbo's Limerick at the end of each video, that neatly sums up the topic.
Follow Bisbo on Twitter:
--------------------------------
@GoBisbo
This video discusses the effect of a price support. A price support consists of a price floor and a guarantee from the government to purchase any excess supply created by the price floor. A price support increases the producer surplus, but results in a net deadweight loss because the cost to the government in purchasing the excess supply outweighs the gain to producers. Thus, a price support reduces the social surplus.—
Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education freely available to the world.
—
SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS:
• A 23-PAGE GUIDE TO MANAGERIAL ACCOUNTING
• A 44-PAGE GUIDE TO U.S. TAXATION
• A 75-PAGE GUIDE TO FINANCIAL STATEMENT ANALYSIS
• MANY MORE FREE PDF GUIDES AND SPREADSHEETS
* http://eepurl.com/dIaa5z
—
SUPPORT EDSPIRA ON PATREON
*https://www.patreon.com/prof_mclaughlin
—
GET CERTIFIED IN FINANCIAL STATEMENT ANALYSIS, IFRS 16, AND ASSET-LIABILITY MANAGEMENT
* https://edspira.thinkific.com
—
LISTEN TO THE SCHEME PODCAST
* Apple Podcasts: https://podcasts.apple.com/us/podcast/scheme/id1522352725
* Spotify: https://open.spotify.com/show/4WaNTqVFxISHlgcSWNT1kc
* Website: https://www.edspira.com/podcast-2/
—
GET TAX TIPS ON TIKTOK
* https://www.tiktok.com/@prof_mclaughlin
—
ACCESS INDEX OF VIDEOS
* https://www.edspira.com/index
—
CONNECT WITH EDSPIRA
* Facebook: https://www.facebook.com/Edspira
* Instagram: https://www.instagram.com/edspiradotcom
* LinkedIn: https://www.linkedin.com/company/edspira
—
CONNECT WITH MICHAEL
* Twitter: https://www.twitter.com/Prof_McLaughlin
* LinkedIn: https://www.linkedin.com/in/prof-michael-mclaughlin
—
ABOUT EDSPIRA AND ITS CREATOR
* https://www.edspira.com/about/
* https://michaelmclaughlin.com
New video for this topic: https://youtu.be/eE_FYK2FlnQ
In this video I explain what happens when the government controls market prices. Price ceilings are a legal maximum price and price floors are a minimum legal price. Make sure that you can draw each of them on a demand and supply graph and identify if there is a shortage or a surplus. Keep in mind that your teacher may use the word "binding" to describe the situation where the price control has an effect on the market.
Need help? Check out the Ultimate Review Packet for FREE: https://www.acdcecon.com/review-packet
So, during times of inflation or deflation, why doesn't the government just set prices? It sounds reasonable, but price ceilings or floors just don't work. Adriene and Jacob explain why. Subsidies, however, are a little different, and sometimes they even work. We'll also explain that. Today you'll learn about stuff like price controls, deadweight loss, subsidies, and efficiency.
Crash Course is on Patreon! You can support us directly by signing up at http://www.patreon.com/crashcourse
Thanks to the following Patrons for their generous monthly contributions that help keep Crash Course free for everyone forever:
Mark, Eric Kitchen, Jessica Wode, Jeffrey Thompson, Steve Marshall, Moritz Schmidt, Robert Kunz, Tim Curwick, Jason A Saslow, SR Foxley, Elliot Beter, Jacob Ash, Christian, Jan Schmid, Jirat, Christy Huddleston, Daniel Baulig, Chris Peters, Anna-Ester Volozh, Ian Dundore, Caleb Weeks
--
Want to find Crash Course elsewhere on the internet?
Facebook - http://www.facebook.com/YouTubeCrashCourse
Twitter - http://www.twitter.com/TheCrashCourse
Tumblr - http://thecrashcourse.tumblr.com
Support Crash Course on Patreon: http://patreon.com/crashcourse
CC Kids: http://www.youtube.com/crashcoursekids
The basic building blocks of trading. The first signs of where to buy and sell. Support and Resistance are the two most widely used indications of where to open and close a trade. David is on hand to share his wisdom about them and show you some tips and tricks on how to get the most out of them.
Visit us at https://trading212.com
Download our free mobile apps for iOS or Android:
https://trading212.com/GetTheApp
------------------------------------------------------------------------
📲 Trading 212 on Social Media:
https://twitter.com/Trading212
https://www.facebook.com/Trading212
https://www.instagram.com/trading212
https://www.tiktok.com/@trading212
https://community.trading212.com
------------------------------------------------------------------------
#Investing #Trading #Equities #trading212
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This video discusses the effect of a price floor. When the government says the price of a good or service cannot go below a certain threshold, we call this threshold a price floor. If the price floor is higher than the equilibrium price, this will result in excess supply of the good or service. This occurs because, at the price floor, consumers demand less of the good than producers are willing to supply. This results in a deadweight loss, which is a reduction in the social surplus.
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MSP or Minimum Support price is being used by governments to ensure farmers get a profit on what they produce. But MSPs actually create more problems than they solve and are directly responsible for plethora of problems the farmer seems to be forever facing. Bisbo explains in detail how fixed prices actually are bad economics. Make sure to see the limerick at the end!
Sources:
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Mint
Satyan Bera & Utpal Bhaskar; July 19, 2013
Himanshu; July 17, 2018
Mint; Siraj Hussain; July 9, 2018
Economic TImes
Madhvi Sally; July 13; 2018
Joel Rebello; July 6; 2018
Times of India
Swaminathan Anklesaria Aiyar; July 8, 2018
Times of India, Jan 2108
Mumbai Mirror
Ajit Ranade; July 7, 2018
Bisbo's previous story on Farmer loan:
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It's no fun being a farmer in India: https://youtu.be/cH_COzDSSUE
Bisbo's other related stories:
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Tuticorin's Sterlite copper plant; was politics responsible for the violence? https://youtu.be/ptSHc7W7DQo
The Ratnagiri oil refinery in collaboration with Saudi Aramco, will be largest in the world: https://youtu.be/9Lh3uLPZ94k
Why protectionism is bad for India: https://youtu.be/QXoUVwvHtEc
Oil prices continue to rise in 2018: https://youtu.be/Gs7F5dhjOUY
India’s beef ban. How a badly implemented ban will pull down ‘India Shining’: https://youtu.be/N3XEeFCN1IQ
Bisbo's Limerick:
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Don't forget to watch Bisbo's Limerick at the end of each video, that neatly sums up the topic.
Follow Bisbo on Twitter:
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@GoBisbo
In economics, a price support may be either a subsidy or a price control, both with the intended effect of keeping the market price of a good higher than the competitive equilibrium level.
In the case of a price control, a price support is the minimum legal price a seller may charge, typically placed above equilibrium. It is the support of certain price levels at or above market values by the government.
A price support scheme can also be an agreement set in order by the government, where the government agrees to purchase the surplus of at a minimum price. For example, if a price floor were set in place for agricultural wheat commodities, the government would be forced to purchase the resulting surplus from the wheat farmers (thereby subsidizing the farmers) and store or otherwise dispose of it.
Short term effects of price supports
Example
If you were to consider a hypothetical market in which supply and demand are such that the equilibrium price and quantity are $5 and 500 units, respectively. The government then institutes a price floor at $6 per unit.
Cardano price has experienced a significant downturn amidst a prevailing bearish sentiment in the cryptocurrency market ... The Cardano price is fast approaching a significant threshold, touching down at the $0.85 support level ... Cardano Price Chart.
This development comes after a strong price surge, followed by a period of consolidation that mirrors the shape of a flag ... XRP’s price initially surges, creating a “flagpole” driven by strong positive momentum and high volume.
28, likely due to profit booking, BGB price’s bull run in Dec ... BGBUSDT daily price chart with RSI ... The overbought RSI levels might force the token to correct, testing the waters at the support near $6.4.
Crypto analyst Jelle has provided a bullish outlook for the Bitcoin price for the remainder of this market cycle. The analyst predicted that the flagship crypto will reach $140,000 and revealed when this price surge could likely happen.
Harvey Price stole the show from his mother Katie, as he took to the stage beside her following her performance in a Cinderella pantomime in Cheshire... @Katie Price bringing Harvey On At The End... 'Dear Santa, my name is Harvey Price.
The Bitcoin price performance is also impacting the crypto market, but most experienced investors argue that this is a momentary phase ... , the price oscillator on the M2 has recently formed, which provides buy and sell signals.
Asian spot liquefied natural gas (LNG) prices gained last week, the first rise after three weekly declines, as the imminent expiry of a transit deal for Russian gas through Ukraine to Europe lent support to prices.
Cardano is navigating a pivotal price range, bounded by the $0.75 and $1.3 thresholds, with its recent price action underscoring a successful pullback to the previously breached $0.75 support. The outcome of a breakout from this range will likely... .
SC directs Punjab government to shift farmer leader Dallewal to Hospital by December 31 Farmers are protesting to demand a legal guarantee for the minimum support price (MSP) and other issues.
The 67-year-old has been on hunger strike since November 26 to press the Centre to accept farmers' demands, including a legal guarantee for a minimum support price (MSP).The apex court ...
In his message, Dallewal also said he had written a letter to the Supreme Court, requesting it to direct the Centre to accept the farmers’ demands, including a legal guarantee of the minimum support price on crops.
The 67-year-old has been on hunger strike since November 26 to press the Centre to accept farmers’ demands, including a legal guarantee for a minimum support price (MSP) ... support if requested.
The initiative aims to reduce import dependency through targeted interventions and increased support prices ...The government's flagship PM-KISAN scheme continues to provide crucial support, having ...