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Refer to the above table. If the government implemented a price control at $20 which of the following is true? Unit Price Quantity Demanded 2,000 1,800 1,600 1,400 1,200 1,000 Quantity Supplied $5 10 300 15 600 20 900 25 1.200 1,500 30 The market is at equilibrium O This would be considered a free market O This would be considered a Price Ceiling O This would be considered a Price Floor

Refer to the above table. If the government implemented a price control at $20 which of the following is true? Unit Price Quantity Demanded 2,000 1,800 1,600 1,400 1,200 1,000 Quantity Supplied $5 10 300 15 600 20 900 25 1.200 1,500 30 The market is at equilibrium O This would be considered a free market O This would be considered a Price Ceiling O This would be considered a Price Floor

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Refer to the above table, If the government implemented a price control at $20 which of the following is true?
Refer to the above table. If the government implemented a price control at $20, which of the following is true? | Unit Price | Quantity Demanded | Quantity Supplied | |------------|-------------------|-------------------| | $5 | 2,000 | 0 | | 10 | 1,800 | 300 | | 15 | 1,600 | 600 | | 20 | 1,400 | 900 | | 25 | 1,200 | 1,200 | | 30 | 1,000 | 1,500 | - ○ The market is at equilibrium - ○ This would be considered a free market - ○ This would be considered a Price Ceiling - ○ This would be considered a Price Floor ### Explanation: The table shows the relationship between unit price, quantity demanded, and quantity supplied. - At $20, the quantity demanded is 1,400 and the quantity supplied is 900, indicating a situation where demand exceeds supply, leading to a shortage. - The options ask about different market control conditions. A price ceiling is a maximum price set below equilibrium to make goods more affordable, often resulting in shortages, which fits the scenario at $20.
Transcribed Image Text:Refer to the above table. If the government implemented a price control at $20, which of the following is true? | Unit Price | Quantity Demanded | Quantity Supplied | |------------|-------------------|-------------------| | $5 | 2,000 | 0 | | 10 | 1,800 | 300 | | 15 | 1,600 | 600 | | 20 | 1,400 | 900 | | 25 | 1,200 | 1,200 | | 30 | 1,000 | 1,500 | - ○ The market is at equilibrium - ○ This would be considered a free market - ○ This would be considered a Price Ceiling - ○ This would be considered a Price Floor ### Explanation: The table shows the relationship between unit price, quantity demanded, and quantity supplied. - At $20, the quantity demanded is 1,400 and the quantity supplied is 900, indicating a situation where demand exceeds supply, leading to a shortage. - The options ask about different market control conditions. A price ceiling is a maximum price set below equilibrium to make goods more affordable, often resulting in shortages, which fits the scenario at $20.
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