a. What is the eq price and quantity in the absence of an effective price floor? P = $| units b. What is the new price and quantity if a price floor is set at $6.00? P = $ Q |units c. Is the price floor at $6.00 effective? No
a. What is the eq price and quantity in the absence of an effective price floor? P = $| units b. What is the new price and quantity if a price floor is set at $6.00? P = $ Q |units c. Is the price floor at $6.00 effective? No
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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
Transcribed Image Text:Price Floors and Ceilings
I. GRAPH
SETTINGS
Reset
Price ($)
Price Floor
Price Ceiling
Price Floor
8
6.00
6.
( Price Floor
P.5
Price
2
1
Price Adjustment
10
15
35
40
45
Qd
Qe
Quantity

Transcribed Image Text:a. What is the equilibrium price and quantity in the absence of an effective price floor?
P = $
|units
b. What is the new price and quantity if a price floor is set at $6.00?
P = $
Q
Junits
c. Is the price floor at $6.00 effective? No
d. What is the new price and quantity if the price floor is set at $3.00?
P = $
Q =
units
e. Is the price floor at $3.00 effective? (Click to select)
f. When the price floor is effective, what happens to the quantity transacted in the market? Increases
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