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3. Analyze the effect of Kitefield's new policy. a. Describe the type of policy enacted(Floor or Ceiling). b. Describe the problem it creates (Surplus or Shortages). Explain what causes the problem identified in part b C.

3. Analyze the effect of Kitefield's new policy. a. Describe the type of policy enacted(Floor or Ceiling). b. Describe the problem it creates (Surplus or Shortages). Explain what causes the problem identified in part b C.

MACROECONOMICS
MACROECONOMICS
14th Edition
ISBN:9781337794985
Author:Baumol
Publisher:Baumol
Chapter4: Supply And Demand: An Initial Look
Section: Chapter Questions
Problem 4TY: The following table summarizes information about the market for principles of economics textbooks:...
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Each spring, the town of Kitefield has a festival of kites. One year, Kitefield experiences an economic depression. causes many of the kite factories to close. The decrease in producers shifts the supply curve to S2 Since most of the workers in the town are laid off and no longer willing to participate in the festival, the Kitefield town council passes an ordinance forbidding the sale of kites at any price ABOVE $15. Paragraph Kite Demand and Supply $40 S2 S 35 30 new old Price Ceiling 10 200 300 400 a0 600 700 800 Quantity of Kites 3. Analyze the effect of Kitefield's new policy. Describe the type of policy enacted(Floor or Ceiling). a b. Describe the problem it creates (Surplus or Shortages). C. Explain what causes the problem identified in part b Price per Kite
Transcribed Image Text:Each spring, the town of Kitefield has a festival of kites. One year, Kitefield experiences an economic depression. causes many of the kite factories to close. The decrease in producers shifts the supply curve to S2 Since most of the workers in the town are laid off and no longer willing to participate in the festival, the Kitefield town council passes an ordinance forbidding the sale of kites at any price ABOVE $15. Paragraph Kite Demand and Supply $40 S2 S 35 30 new old Price Ceiling 10 200 300 400 a0 600 700 800 Quantity of Kites 3. Analyze the effect of Kitefield's new policy. Describe the type of policy enacted(Floor or Ceiling). a b. Describe the problem it creates (Surplus or Shortages). C. Explain what causes the problem identified in part b Price per Kite
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