Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:18-19. In the competitive market for white sugar, consumer demand is given by P=100-0.050 and
suppliers' behaviour is represented by the supply curve of P=1+0.005Q, where P is measured in dollars
and Q is measured in kilos per month. Questions 17 through 19 refer to this market.
18. Imagine now that the government imposes a price ceiling of $5.00 per kilo on sugar, and that the
ceiling is obeyed by all market participants. In the resulting equilibrium the total number of kilos of sugar
exchanged in the market is equal to:
A) 2100
G) 800
B) 2000
H) 600
A) $5
G) $70
C) 1900
I) 400
B) $10
H) $80
19. Suppose suppliers obey the price ceiling but consumers sell sugar on a black market. What will the
black market price for sugar be?
D) 1400 E) 1200
J) None of the above
C) $10.50
I) $21
E) $50
F) 1000
D) $40
J) None of the above
F) $60
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