**Market Equilibrium Analysis**Consider a perfectly competitive market with a demand curve given by $ p = 60 - 2Q_D $. If the market supply curve is given by $ p = 3Q_S $, determine which of the following restrictions will prevent the market from reaching equilibrium. (Check all that apply)- [ ] a price ceiling set at $12- [ ] a price ceiling set at $40- [ ] a price floor set at $10- [ ] a price floor set at $40**Explanation:**To analyze which price restrictions prevent the market from reaching equilibrium, we need to understand the impact of price ceilings and floors relative to the equilibrium price.1. **Equilibrium Calculation:** - Set the demand and supply equations equal: $ 60 - 2Q = 3Q $. - Solve for $ Q $ (quantity). - Calculate equilibrium price by substituting back to either equation.2. **Price Ceilings and Floors:** - **Price Ceiling:** A maximum price set below equilibrium prevents the price from rising to its natural equilibrium level, causing shortages. - **Price Floor:** A minimum price set above equilibrium prevents the price from falling to its natural equilibrium level, causing surpluses.Each option should be evaluated to see if the restriction interferes with the equilibrium price.

Consider a perfectly competitive market with demand curve given by p = 602QD. If the market supply curve is given by p = 3Qs, which of the following restrictions will prevent the market from reaching equilibrium? (check all that apply) a price ceiling set at $12 a price ceiling set at $40 a price floor set at $10 a price floor set at $40

Consider a perfectly competitive market with demand curve given by p = 602QD. If the market supply curve is given by p = 3Qs, which of the following restrictions will prevent the market from reaching equilibrium? (check all that apply) a price ceiling set at $12 a price ceiling set at $40 a price floor set at $10 a price floor set at $40

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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