5. Using the relationship shown on Figure 1, answer the following questions. A If the government were to establish a price floor of $15 for the products described in Figure 1, would we get a shortage or surplus, or neither? B. How many units of product would be in shortage or surplus? $20 $15 $12 Price $10 $8 $5 13 $2 Figure 1 - Supply and Demand Curve Demand Supply 20 30 40 50 60 70 80 90 100 Quantity
5. Using the relationship shown on Figure 1, answer the following questions. A If the government were to establish a price floor of $15 for the products described in Figure 1, would we get a shortage or surplus, or neither? B. How many units of product would be in shortage or surplus? $20 $15 $12 Price $10 $8 $5 13 $2 Figure 1 - Supply and Demand Curve Demand Supply 20 30 40 50 60 70 80 90 100 Quantity
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:5. Using the relationship shown on Figure 1, answer the following questions.
A If the government were to establish a price floor of $15 for the products described in
Figure 1, would we get a shortage or surplus, or neither?
B. How many units of product would be in shortage or surplus?
$20
$15
$12
Price $10
$8
$5
$2
Figure 1 - Supply and Demand Curve
Demand
Supply
20 30 40 50 60 70 80 90 100
Quantity
Expert Solution
Step 1
Equilibrium is defined as a situation in which the demand and supply conditions coincide with each other and the market is in a stable condition. Price control measures such as floor price and price ceilings disrupts this equilibrium condition resulting in change in price and quantity.
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