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Refer to the accompanying figure, which shows the market for cups of coffee. Consider the original supply and the original demand curve. If the governmer imposes a price ceiling of $1.00 on a cup of coffee, then there would be: Original Supply 3.5 New Supply 2.5 1.5 New Demand 0.5 Original Demand 0. 10 20 30 40 50 60 70 80 90 Quantity (cups/hour) Multiple Choice an excess supply of coffee. ( Prev 11 of 27 Next > 3. 1. Price ($/cup)

Refer to the accompanying figure, which shows the market for cups of coffee. Consider the original supply and the original demand curve. If the governmer imposes a price ceiling of $1.00 on a cup of coffee, then there would be: Original Supply 3.5 New Supply 2.5 1.5 New Demand 0.5 Original Demand 0. 10 20 30 40 50 60 70 80 90 Quantity (cups/hour) Multiple Choice an excess supply of coffee. ( Prev 11 of 27 Next > 3. 1. Price ($/cup)

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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The image shows a graph that represents the market for cups of coffee. There are two supply curves and two demand curves. 1. **Axes**: - The vertical axis represents the price of coffee per cup, ranging from $0 to $4. - The horizontal axis represents the quantity of coffee cups per hour, ranging from 0 to 90. 2. **Curves**: - **Original Supply (S1)**: An upward-sloping line originating near the bottom left and extending towards the top right. - **New Supply (S2)**: Another upward-sloping line, indicating a shift to the right of the original supply curve, which suggests an increase in supply. - **Original Demand (D1)**: A downward-sloping line from top left to bottom right. - **New Demand (D2)**: Another downward-sloping line that indicates a shift to the right of the original demand curve, showing an increase in demand. 3. **Scenario**: The problem states: "Consider the original supply and the original demand curve. If the government imposes a price ceiling of $1.00 on a cup of coffee, then there would be:" 4. **Multiple Choice**: - An option suggesting "an excess supply of coffee." This implies examining the intersection of the original curves (S1 and D1) with the imposed price ceiling at $1.00, likely resulting in a different equilibrium situation.
Transcribed Image Text:The image shows a graph that represents the market for cups of coffee. There are two supply curves and two demand curves. 1. **Axes**: - The vertical axis represents the price of coffee per cup, ranging from $0 to $4. - The horizontal axis represents the quantity of coffee cups per hour, ranging from 0 to 90. 2. **Curves**: - **Original Supply (S1)**: An upward-sloping line originating near the bottom left and extending towards the top right. - **New Supply (S2)**: Another upward-sloping line, indicating a shift to the right of the original supply curve, which suggests an increase in supply. - **Original Demand (D1)**: A downward-sloping line from top left to bottom right. - **New Demand (D2)**: Another downward-sloping line that indicates a shift to the right of the original demand curve, showing an increase in demand. 3. **Scenario**: The problem states: "Consider the original supply and the original demand curve. If the government imposes a price ceiling of $1.00 on a cup of coffee, then there would be:" 4. **Multiple Choice**: - An option suggesting "an excess supply of coffee." This implies examining the intersection of the original curves (S1 and D1) with the imposed price ceiling at $1.00, likely resulting in a different equilibrium situation.
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