Natural Gas Market: Due to persistent shortages, Congress eliminates the cap (i.e., price ceiling) on natural gas prices. Graph market analysis and explain effects.
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Natural Gas Market: Due to persistent shortages, Congress eliminates the cap (i.e.,
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- (3) A recent study found that the demand-and-supply schedules for Frisbees are as follows: a. What are the equilibrium price and quantity of Frisbees? (2)b. Frisbee manufacturers persuade the government that Frisbee production improvesscientists’ understanding of aerodynamics and thus is important for nationalsecurity. A concerned Diet members votes to impose a price floor $2 above theequilibrium price. What is the new market price? How many Frisbees are sold? (4)c. University students march on Tokyo and demand a reduction in the price ofFrisbees. An even more concerned Diet members votes to repeal the price floorand impose a price ceiling $1 below the former price floor. What is the newmarket price? How many Frisbees are sold? Price per Frisbee Quantity Demanded Quantity Supplied $11 1 million Frisbees 15 million Frisbees 10 2 12 9 4 9 8 6 6 7 8 3 6 10 1Current Stats for Gasoline: Government Enforced Price Ceiling - $4.50/gallon Current Market Equilibrium - $3.00/gallon OPEC, the largest global supplier of oil used to make gasoline, has decided to reduce output by 50%. This policy change is expected to drive up the cost of gasoline to $5.00/gallon. How does that price change interact with the price ceiling? A. Changes the Price Ceiling from Binding to Non-Binding B. Disrupts Oil Supply C. Changes the Price Ceiling from Non-Binding to Binding D. No Change. Which statement best explains how a price ceiling affects the market for gasoline? It can cause more gasoline producers to enter the market. It can lead to producers increasing their production costs for gasoline. It can cause shortages in the supply of gasoline. It can lead to a decrease in the demand from consumers for gasoline.
- 25.)A binding price ceiling is imposed in the market. the equilibrium price and creates a a.) Above, surplus b.) Below, surplus c.) Above, shortage d.) Below, shortage25. The instability of the prices of farm products (e.g., corn) can be explained as the result of a. the highly elastic demand for such goods. b. variations in weather and the highly inelastic demand for such goods. c. the high income elasticity of demand for such goods and governmental price controls. d. none of the above1. Using the following Supply and Demand schedules for bicycles to answer the questions below. Quantity Demanded (Qd) Price Quantity Supplied (Qs) $300 60 30 400 55 40 500 50 50 600 45 60 700 40 70 800 35 80 a. In response to lobbying by the Bicycle Ridders Association, Congress places a price ceiling of $700 on bicycles. What effect will this have on the market for bicycles? Why? b. In response to lobbying by the same Bicycle Ridder Association, Congress places a price ceiling of $400 on bicycles, Using the information above, impose the price ceiling. What is the result of the price ceiling of $400 on bicycles?
- 2. The Public Utility Regulatory Commission (PURC) increased the price of electricity by 78%. (i) With the help of a diagram, explain how this price increase will affect demand and supply of electricity? Will there be a shortage or surplus supply of electricity? (ii) Following the threat of strike action by the Trades Union Congress (TUC), the government intervened to set a price ceiling and agreed to pay the difference between the price ceiling and the equilibrium price. What will happen to quantity demanded and supplied of electricity if the government fails to pay the difference between the price ceiling and equilibrium price? Will there be a surplus or a shortage in the electricity market? Explain with the aid of a diagram.5. Supply and Demand. There are 60 potential sellers in the market for widgets: 10 are willing to sell one unit at a price of $5 or higher; 20 are willing to sell one unit at $10 or higher; and 30 are willing to sell one unit at $15 or higher. (a) Draw the supply curve in a suitably labelled graph. (b) The government will buy any amount of widgets for $12 or less. Represent the equilibrium quantity of widgets in the market.1. A binding price floor in a market is removed. Which of the following is likely to occur as a result? SELECT THE CORRECT ANSWER a. The market price will rise. b. The demand for the item will fall. c. The market price will fall. d. The supply of the item will rise. 2. In 2016, Amazon began charging a 5.75% sales tax on products it sells in the District of Columbia. Holding all else constant, the effect of this tax would be to _____ in the District of Columbia. Select the correct answer a. decrease Amazon sales b. decrease prices for local businesses c. decrease the number of consumers d. increase Amazon sales
- 1. Suppose market demand for gasoline is given by QD = 60-2P where QD is quantity demanded and P is the market price. Market supply is given by Qs = 4P where Qs is quantity supplied and P is the market price. (a) Find the equilibrium price and quantity in this market. (b) What is the consumer surplus and producer surplus? (c) Suppose that the government imposes a $3 tax on the good, to be included in the posted price (i.e. tax paid by suppliers). What is new equilibrium posted price? How much of that price do producers keep? What is the new market equilibrium quantity? What is the change in surplus for consumers? What is the change in surplus for producers?02. What would be the impact of a price ceiling of $ 9 (a) a shortage of 12 units. (b) a shortage of 9 units. (c) a new equilibrium quantity would be established. (d) a surplus of 20 units. (e) a surplus of 12 units.3. The demand for a product is given by the equation Qd = 500 - 2P, and the supply is given by Q = 100+ 3P. (a) Determine the equilibrium price and quantity. (b) The government imposes a price ceiling of $50. What will be the quantity demanded and quantity supplied at this price? (c) Calculate the shortage or surplus resulting from the price ceiling. (d) Discuss the potential consequences of the price ceiling on the market.