1. Suppose demand and supply are given by: P =120 – 4Q4 P = 2Q, a. Find equilibrium price and quantity. b. What is the effect of a price ceiling set at P=20? c. What is the effect of a price floor set at P=20?

1. Suppose demand and supply are given by: P =120 – 4Q4 P = 2Q, a. Find equilibrium price and quantity. b. What is the effect of a price ceiling set at P=20? c. What is the effect of a price floor set at P=20?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1. Suppose demand and supply are given by:
P = 120 – 4Q,
P = 2Q,
%3D
a. Find equilibrium price and quantity.
b. What is the effect of a price ceiling set at P=20?
c. What is the effect of a price floor set at P=20?
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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