According to the graph below, with a price ceiling present in this market, if the supply curve for gasoline shifts from Sl to S2. P P2 P3 P1 S2 $1 Ceiling D Q Q2 Q1 The price will increase to P2. A surplus will occur at the new market price of P2. The market price will stay at P1 due to the pricing ceiling. A shortage will occur at the price ceiling of P3. Nothing happens to the equilibrium.

According to the graph below, with a price ceiling present in this market, if the supply curve for gasoline shifts from Sl to S2. P P2 P3 P1 S2 $1 Ceiling D Q Q2 Q1 The price will increase to P2. A surplus will occur at the new market price of P2. The market price will stay at P1 due to the pricing ceiling. A shortage will occur at the price ceiling of P3. Nothing happens to the equilibrium.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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