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Economic Analysis | Assignment (Doc)

   

Added on  2020-03-16

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Running head: ECONOMIC ANALYSISECONOMIC ANALYSISName of student:Name of University:Authors note:
Economic Analysis | Assignment (Doc)_1
2ECONOMIC ANALYSISTable of ContentsMarket of Tertiary Education sector prior to reforms................................................................4Market of Tertiary Education market after the reform...............................................................5Comparison of deregulation when supply is elastic and inelastic..............................................6Economic Efficiency of Tertiary Education market before and after the reform......................7Equity of tertiary education market............................................................................................8References..................................................................................................................................9
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3ECONOMIC ANALYSISMarket of Tertiary Education sector prior to reforms Domestic and local governments more often adopt price control policies, these pricecontrols are legal minimum or maximum prices set by the government in order to manageeconomy directly by government intervention. Government generally follows two types ofprice controls and price ceiling is one of them. Price ceiling is thus a legal maximum pricethat can be set by the government.. In this context of market of Tertiary Education sector ,price ceiling is being imposed. This ceiling generally creates a shortage and this shortage iscreated since the price is set below the market price. Due to this shortage excess demand orsupply is created. At this price producers will not be willing to produce and the reason isprice ceiling and this low production creates consumer demand high, as a result demand willexceed supply and people who are willing to buy more but cannot buy. In such a situation ifdemand curve is elastic then effect on consumer surplus is positive, producers on the otherhand will be affected as this surplus will reduce number of firms willing to take that lowprice, and the existing firms have to accept lower price. The shortage of goods results inconsumers to have queued up in line to get commodities, government rationing and thegrowth of black market dealing with the scare commodities (Pu, 2013).
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