PriceDemandSupply$12519$108.17$81115$61313$41611$2189Use the table above. If a $4 price ceiling is imposed on the market, there will bea 5 unit shortage.a 5 unit surplus.a 10 unit surplus.a 10 unit shortage.

Answered: Price Demand Supply $12 19 $10 8 17 $8…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Price
Demand
Supply
$12
5
19
$10
8.
17
$8
11
15
$6
13
13
$4
16
11
$2
18
9
Use the table above. If a $4 price ceiling is imposed on the market, there will be
a 5 unit shortage.
a 5 unit surplus.
a 10 unit surplus.
a 10 unit shortage.

Expert Solution

Step 1

Shortage is defined as an economic condition under which the quantity demanded is more than the quantity supplied at the market price. In the normal conditions the economy operates at the equilibrium quantity and in at equilibrium price. However, if the equilibrium prices are very higher than the government interferes in the free market and imposes a price ceiling on the product to limit the price of the product to ensure that all the consumers are able to purchase the product. In this case, the market price is less than the equilibrium price because of which there arises a situation of shortage in the economy.

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