[Related to the Economics in Practice in this section] The feature states that in New Jersey, a law against price gouging prohibits price increases of more than 10 percent in an emergency situation. Assume that prior to Sandy the equilibrium price for portable generators was $100 and the equilibrium quantity was 200 units per month. (Point 1 in the figure on the right). After Sandy, demand increased to 500 units per month (shown as the shift from Do to D₁) and generator sellers raised prices to the maximum amount allowed by law (shown as MAX). Do you think that the new higher price will be high enough to meet the increased demand? Using the line drawing tool, draw a market supply curve through point 1 to show that the maximum allowable price is high enough for the increased demand to be met. Label it as 'So Carefully follow the instructions above, and only draw the required objects. According to the graph, because the allowable price is high enough for the increased demand to be met, the market exhibits Had the maximum allowable price not been high enough for the increased demand to be met, the market would have shown Price 120- The Market for Portable Generators 110- 100- 90- 80- 70- 100 200 Do 300 400 500 600 MAX D₁ Q ☑
[Related to the Economics in Practice in this section] The feature states that in New Jersey, a law against price gouging prohibits price increases of more than 10 percent in an emergency situation. Assume that prior to Sandy the equilibrium price for portable generators was $100 and the equilibrium quantity was 200 units per month. (Point 1 in the figure on the right). After Sandy, demand increased to 500 units per month (shown as the shift from Do to D₁) and generator sellers raised prices to the maximum amount allowed by law (shown as MAX). Do you think that the new higher price will be high enough to meet the increased demand? Using the line drawing tool, draw a market supply curve through point 1 to show that the maximum allowable price is high enough for the increased demand to be met. Label it as 'So Carefully follow the instructions above, and only draw the required objects. According to the graph, because the allowable price is high enough for the increased demand to be met, the market exhibits Had the maximum allowable price not been high enough for the increased demand to be met, the market would have shown Price 120- The Market for Portable Generators 110- 100- 90- 80- 70- 100 200 Do 300 400 500 600 MAX D₁ Q ☑
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter3: Supply And Demand: Theory
Section: Chapter Questions
Problem 24QP
Related questions
Question
everything is in the picture (13)
the first blank has the options (an equilibrium or a surplus)
the second blank has the options (a surplus or a shortage)
![[Related to the Economics in Practice in this section] The feature states that in New Jersey, a law
against price gouging prohibits price increases of more than 10 percent in an emergency situation.
Assume that prior to Sandy the equilibrium price for
portable generators was $100 and the equilibrium quantity was 200 units per month. (Point 1 in the figure
on the right).
After Sandy, demand increased to 500 units per month (shown as the shift from Do to D₁) and generator
sellers raised prices to the maximum amount allowed by law (shown as MAX).
Do you think that the new higher price will be high enough to meet the increased demand?
Using the line drawing tool, draw a market supply curve through point 1 to show that the maximum
allowable price is high enough for the increased demand to be met. Label it as 'So
Carefully follow the instructions above, and only draw the required objects.
According to the graph, because the allowable price is high enough for the increased demand to be met,
the market exhibits
Had the maximum allowable price not been high enough for the increased demand to be met, the market
would have shown
Price
120-
The Market for Portable Generators
110-
100-
90-
80-
70-
100
200
Do
300 400 500 600
MAX
D₁
Q
☑](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff739e319-24f0-41bc-9841-9629230159f2%2F30f1356f-986f-4910-9858-cf94990b1220%2Fr4maprf_processed.png&w=3840&q=75)
Transcribed Image Text:[Related to the Economics in Practice in this section] The feature states that in New Jersey, a law
against price gouging prohibits price increases of more than 10 percent in an emergency situation.
Assume that prior to Sandy the equilibrium price for
portable generators was $100 and the equilibrium quantity was 200 units per month. (Point 1 in the figure
on the right).
After Sandy, demand increased to 500 units per month (shown as the shift from Do to D₁) and generator
sellers raised prices to the maximum amount allowed by law (shown as MAX).
Do you think that the new higher price will be high enough to meet the increased demand?
Using the line drawing tool, draw a market supply curve through point 1 to show that the maximum
allowable price is high enough for the increased demand to be met. Label it as 'So
Carefully follow the instructions above, and only draw the required objects.
According to the graph, because the allowable price is high enough for the increased demand to be met,
the market exhibits
Had the maximum allowable price not been high enough for the increased demand to be met, the market
would have shown
Price
120-
The Market for Portable Generators
110-
100-
90-
80-
70-
100
200
Do
300 400 500 600
MAX
D₁
Q
☑
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