Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter3: Demand And Supply
Section: Chapter Questions
Problem 16RQ: What is the relationship between quantity Demanded and quantity supplied at equilibrium? What is the...
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Transcribed Image Text:Question 21
Figure #1
Price
$20
18
16
14
12
10
8
6.
4
10 20 30 40 50 60 70 80 90 100 Quantity
Refer to Figure #1. If the government imposes a price floor at S14. there would be a
O shortage of 40 units and the law of supply would force the price falling from S14 to a lower price to get rid of the shortage
O shortage of 40 units and the law of supply would force the price rising up from $14 to a higher price to get rid of the shortage
O surplus of 40 units and the law of supply and demand would force the price falling from S14 to $10 to get the surplus
O surplus of 40 units and the law of supply and demand are not allowed to force the price falling from $14 to $10 to clear the surplus
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