2. Suppose that the government determines that the price of high speed internet service is too high. In order to reduce the price, it proposes three alternative price ceilings: $20 a month, $40 a month, and $60 a month. The demand and supply schedules for high speed internet service are given below. Price $15 $20 $25 $30 $35 $40 $45 $50 $55 $60 $65 Quantity demanded (millions of connections) 220 200 180 160 140 120 100 80 60 40 20 Quantity supplied (millions of connections) 0 a. In the absence of government intervention, i. What is the equilibrium price? ii. What is the equilibrium quantity? 10 20 40 60 ii. What will be the quantity traded? in What will be the excess demand? 80 100 130 170 210 250 b. If the government enacts a price ceiling of $20 per month, i. What will be the price?

2. Suppose that the government determines that the price of high speed internet service is too high. In order to reduce the price, it proposes three alternative price ceilings: $20 a month, $40 a month, and $60 a month. The demand and supply schedules for high speed internet service are given below. Price $15 $20 $25 $30 $35 $40 $45 $50 $55 $60 $65 Quantity demanded (millions of connections) 220 200 180 160 140 120 100 80 60 40 20 Quantity supplied (millions of connections) 0 a. In the absence of government intervention, i. What is the equilibrium price? ii. What is the equilibrium quantity? 10 20 40 60 ii. What will be the quantity traded? in What will be the excess demand? 80 100 130 170 210 250 b. If the government enacts a price ceiling of $20 per month, i. What will be the price?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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