Problem Set #5: Price Controls1. Suppose demand and supply are given by:P =120 – 4Q.P = 2Q,d. What is the effect of a price ceiling set at P=60?e. What is the effect of a price floor set at P=60?

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Answered: . Suppose demand and supply are given…

. Suppose demand and supply are given by: P = 120 – 4Qd P = 2Q, d. What is the effect of a price ceiling set at P=60? e. What is the effect of a price floor set at P=60?

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

Problem Set #5: Price Controls
1. Suppose demand and supply are given by:
P =120 – 4Q.
P = 2Q,
d. What is the effect of a price ceiling set at P=60?
e. What is the effect of a price floor set at P=60?

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