Refer to the figure to answer the following two questions. 500 P 450 400 350 300 250 200 150 100 50 Q 0 35 70 105 140 175 210 245 280 315 350 385 420 455 490 525 1) If the government imposes a binding price floor of $350.00 in this market, what is the result? a. There will be a of units. b. The redistribution of surplus from consumers to the producer is equal to $ c. The deadweight loss due to price floor is $ 2) If the government imposes a binding price ceiling of $100.00 in this market, what is the result? a. There will be a of units. b. The highest price that would be charged in a black market is $ c. The deadweight loss due to price ceiling is $

Refer to the figure to answer the following two questions. 500 P 450 400 350 300 250 200 150 100 50 Q 0 35 70 105 140 175 210 245 280 315 350 385 420 455 490 525 1) If the government imposes a binding price floor of $350.00 in this market, what is the result? a. There will be a of units. b. The redistribution of surplus from consumers to the producer is equal to $ c. The deadweight loss due to price floor is $ 2) If the government imposes a binding price ceiling of $100.00 in this market, what is the result? a. There will be a of units. b. The highest price that would be charged in a black market is $ c. The deadweight loss due to price ceiling is $

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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Total Surplus and Deadweight Loss

Economists generally define efficiency as when it is impossible to improve the situation of one party without imposing a cost on another. Conversely, if a situation gets inefficient, a party will benefit more than the other without imposing costs on others.

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Step 1: Define price floor

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Step 2: Find the answer subparts answers for a price floor is $350

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Step 3: Find the subparts answers for a price ceiling of $100.

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