PRICE 10 40 4 3 2 Supply Price Ceiling Demand

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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7. Effects of a Price Ceiling (ID: 015.06.MANK09)
PRICE
m
7
6
10
5
3
2
1
Figure 6-2
Supply
Price Celling
Oc. causes a shortage of 30 units of the good.
Od. is not binding because it is set below the equilibrium price.
Demand
30 60 90 120 150 180 210 240
QUANTITY
Refer to Figure 6-2. The price ceiling
Oa. causes a shortage of 60 units of the good.
Ob. makes it necessary for sellers to ration the good using a mechanism other than price.
Transcribed Image Text:7. Effects of a Price Ceiling (ID: 015.06.MANK09) PRICE m 7 6 10 5 3 2 1 Figure 6-2 Supply Price Celling Oc. causes a shortage of 30 units of the good. Od. is not binding because it is set below the equilibrium price. Demand 30 60 90 120 150 180 210 240 QUANTITY Refer to Figure 6-2. The price ceiling Oa. causes a shortage of 60 units of the good. Ob. makes it necessary for sellers to ration the good using a mechanism other than price.
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