1. Using the following Supply and Demand schedules for bicycles to answer the questions below. Quantity Supplied (Qs) Price Quantity Demanded | (Qd) $300 60 30 400 55 40 500 50 50 600 45 60 700 40 70 800 35 80 a. In response to lobbying by the Bicycle Ridders Association, Congress places a price ceiling of $700 on bicycles. What effect will this have on the market for bicycles? Why? b. In response to lobbying by the same Bicycle Ridder Association, Congress places a price ceiling of $400 on bicycles, Using the information above, impose the price ceiling. What is the result of the price ceiling of $400 on bicycles?

1. Using the following Supply and Demand schedules for bicycles to answer the questions below. Quantity Supplied (Qs) Price Quantity Demanded | (Qd) $300 60 30 400 55 40 500 50 50 600 45 60 700 40 70 800 35 80 a. In response to lobbying by the Bicycle Ridders Association, Congress places a price ceiling of $700 on bicycles. What effect will this have on the market for bicycles? Why? b. In response to lobbying by the same Bicycle Ridder Association, Congress places a price ceiling of $400 on bicycles, Using the information above, impose the price ceiling. What is the result of the price ceiling of $400 on bicycles?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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