Answered: Price Qd Qs $1.60 9,000 5,000 $2.00…

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

A low-income country decides to set a price ceiling
on bread so it can make sure that bread is affordable to
the poor.Table 3.11 provides the conditions of demand
and supply. What are the equilibrium price and
equilibrium quantity before the price ceiling? What will
the excess demand or the shortage (that is, quantity
demanded minus quantity supplied) be if the price
ceiling is set at $2.40? At $2.00? At $3.60?

Price
Qd
Qs
$1.60
9,000
5,000
$2.00
8,500
5,500
$2.40
8,000
6,400
$2.80
7,500
7,500
$3.20
7,000
9,000
$3.60
6,500
11,000
$4.00
6,000
15,000
Table 3.11

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