5. Suppose the market shown below. a. Suppose now that the government decides to introduce a price FLOOR above the equilibrium price. How would that affect the market? Draw the change on the graph below. b. What is the new quantity demanded (label it Qd)? What is the new quantity supplied (label it Qs)? What is the new quantity exchanged? What is the new price at which the good is exchanged? c. Indicated whether the market is in equilibrium, or whether there is a surplus or shortage.

5. Suppose the market shown below. a. Suppose now that the government decides to introduce a price FLOOR above the equilibrium price. How would that affect the market? Draw the change on the graph below. b. What is the new quantity demanded (label it Qd)? What is the new quantity supplied (label it Qs)? What is the new quantity exchanged? What is the new price at which the good is exchanged? c. Indicated whether the market is in equilibrium, or whether there is a surplus or shortage.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter4: Demand, Supply, And Market Equilibrium

Section: Chapter Questions

Problem 21P

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