legislating maximum or minimum prices, the government has kept the prices of certain goods below or above equilibrium We will look at the arguments for direct government intervention in controlling prices as well as the consequences of such policies As we shall see, preventing the price of a good from finding its own equilibrium often has consequences that may be at odds with the intentions of the policy makers who put the regulations in place In the third section of the chapter we will look at the market for health care This market is interesting because how well (or poorly) it works can be a matter of life and death and because it has special characteristics In particular, markets in which participants not pay for goods directly, but rather pay insurers who then pay the suppliers of the goods, operate somewhat differently from those in which participants pay directly for their purchases This extension of demand and supply analysis reveals much about how such markets operate 4.1 Putting Demand and Supply to Work LEARNING OBJECTIVES Learn how to apply the model of demand and supply to explaining the behavior of equilibrium prices and quantities in a variety of markets Explain how technological change can be represented using the model of demand and supply Explain how the model of demand and supply can be used to explain changes in prices of shares of stock Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 183