Friday, August 29, 2008

Interesting Price Floor Problem

The Cato Institute regularly publishes interesting economic podcasts. The podcast below describes an unusual price setting problem: should wholesalers be allowed to set minimum prices for retailers? The answer is: in some cases, yes. This might be an interesting class assignment. Have the students listen to the podcast and describe how the rise of the internet may make such price floors more important.

http://www.cato.org/dailypodcast/podcast-archive.php?podcast_id=715