The weekly demand for Kelewele among the 2018 batch of MBA students at UPSA is Qdx = 900 – 10Px + 0.2I + 5Py – 4Pz Where Qdx is the quantity demanded of Kelewele Px is the price of Kelewele per lb I is the consumer income in Ghana Cedis Py and Pz are the prices of two goods that are related to Kelewele Now suppose the weekly supply function for Kelewele at UPSA campus is QSx = -260 + 10Px – 2Pi Where QSx is the quantity supplied of Kelewele and Pi is the price of inputs used in preparing Kelewele Suppose authorities at UPSA are concerned that Kelewele sellers at UPSA are exploiting students by charging exorbitant price for their Kelewele so they decree that no one should sell Kelewele above GHȼ 40 per lb and What type of price control measure is this?Following the decree, will there be excess demand or excess supply of Kelewele at UPSA? Calculate the excess demand or excess supply?To ensure that price control measure stands, the authorities have to produce the excess demand or buy the excess supply in d) off the market. How much will this cost the authorities?

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The weekly demand for Kelewele among the 2018 batch of MBA students at UPSA is

Qdx = 900 – 10Px + 0.2I + 5Py – 4Pz

Where Qdx is the quantity demanded of Kelewele

Px is the price of Kelewele per lb

I is the consumer income in Ghana Cedis

Py and Pz are the prices of two goods that are related to Kelewele

Now suppose the weekly supply function for Kelewele at UPSA campus is QSx = -260 + 10Px – 2Pi

Where QSx is the quantity supplied of Kelewele and Pi is the price of inputs used in preparing Kelewele

Suppose authorities at UPSA are concerned that Kelewele sellers at UPSA are exploiting students by charging exorbitant price for their Kelewele so they decree that no one should sell Kelewele above GHȼ 40 per lb and What type of price control measure is this?
Following the decree, will there be excess demand or excess supply of Kelewele at UPSA? Calculate the excess demand or excess supply?
To ensure that price control measure stands, the authorities have to produce the excess demand or buy the excess supply in d) off the market. How much will this cost the authorities?

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