The total demand for Cement and the total supply of Cement per month in the UAE construction market are as shown in the table below: a) Suppose that the government establishes a price ceiling of Dh 295 per ton for ,Cement. What might prompt the government to establish this price ceiling? Explain carefully the main effects. Demonstrate your answer graphically. b) Next, suppose that the government establishes a price floor of Dh 320 per ton for Cement. What will be the main effects of this price floor? Demonstrate your answer graphically. c) Read the article below that published in Khaleej Times and state who sets the price ceiling in UAE? Also comment briefly on the cement prices in 2008 as compared to present cement prices? and comment if price ceiling action by the Government was / is effective.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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The total demand for Cement and the total supply of Cement per month in the UAE construction market are as shown in the table below:

a) Suppose that the government establishes a price ceiling of Dh 295 per ton for ,Cement. What might prompt the government to establish this price ceiling? Explain carefully the main effects. Demonstrate your answer graphically.


b) Next, suppose that the government establishes a price floor of Dh 320 per ton for Cement. What will be the main effects of this price floor? Demonstrate your answer graphically.


c) Read the article below that published in Khaleej Times and state who sets the price ceiling in UAE? Also comment briefly on the cement prices in 2008 as compared to present cement prices? and comment if price ceiling action by the Government was / is effective.

Million Tons of Cement
Price per Ton
Million Ton of Cement
Demanded
Supplied
65
275
40
60
295
50
55
305
55
50
315
60
45
320
70
40
335
80
Transcribed Image Text:Million Tons of Cement Price per Ton Million Ton of Cement Demanded Supplied 65 275 40 60 295 50 55 305 55 50 315 60 45 320 70 40 335 80
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