Refer to the accompanying figure, which shows the market for cups of coffee. 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: Original Supply 3.5 3 New Supply 2.5 2 * 1.5 New Demand 0.5 Original Demand 10 20 30 40 50 60 70 80 90 Quantity (cups/hour) Multiple Cholce an excess demand for coffee. a short-term excess demand for coffee, followed by an increase in the equilibrium price. an excess supply of coffee. a new equilibrilum at a price of $1.00 per cup and a quantity of 50 cups per hour Price (S/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 government imposes a price ceiling of $1.00 on a cup of coffee, then there would be: Original Supply 3.5 3 New Supply 2.5 2 * 1.5 New Demand 0.5 Original Demand 10 20 30 40 50 60 70 80 90 Quantity (cups/hour) Multiple Cholce an excess demand for coffee. a short-term excess demand for coffee, followed by an increase in the equilibrium price. an excess supply of coffee. a new equilibrilum at a price of $1.00 per cup and a quantity of 50 cups per hour Price (S/cup)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Economic
Transcribed Image Text:Refer to the accompanying figure, which shows the market for cups of coffee. 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
Original Supply
3.5
3
New Supply
2.5
2
1.5
1
New Demand
0.5
Original Demand
10
20
30 40
50
60
70
80
90
Quantity (cups/hour)
Multiple Choice
an excess demand for coffee.
a short-term excess demand for coffee, followed by an increase in the equilibrium price.
an excess supply of coffee.
a new equilibrium at a price of $1.00 per cup and a quantity of 50 cups per hour.
Price (S/cup)
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