**Economics Problem****Demand Curve:** $ P = 300 - Q_d $**Supply Curve:** $ P = 30 + 2Q_s $**Question:** What is the effect of a price ceiling at $ P = 230 $?- ⃝ Shortage = 30- ⃝ Shortage = 70- ⃝ No effect- ⃝ Surplus = 30To solve this, calculate the equilibrium quantity where supply equals demand, and then determine the quantities demanded and supplied at the ceiling price of $ P = 230 $. Compare these to identify any shortage or surplus.

Given: P = 300- Qd P= 30 +2Qs At the price ceiling of P = 230 , Demand : P = 300- Qd 230 = 300 - Qd Qd = 70 Supply : P= 30 +2 Qs 230= 30 +2Qs Qs = 100 So there would be an excess supply of 30 that is surplus of 30 .

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Demand Curve: P=300-Qd Supply Curve: P=30+2Qs What is the effect of a price ceiling at P=230? Shortage=30 Shortage=70 No effect Surplus=30

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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