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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

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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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
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
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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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