When a price ceiling of zero is imposed on the organ market, by how much does a. The quantity of organs demanded increase? O The quantity of organs demanded doesn't change with the imposition of a zero price ceiling. O The quantity of organs demanded increases from qa to ad O The quantity of organs demanded increases from qe to ad The quantity of organs demanded increases from qa to qE b. The market demand increase? O The demand for organs increases from qa to qE O The demand for organs increases from qe to ad O The demand for organs doesn't change with the imposition of a zero price ceiling. O The demand for organs increases from qa to ad c. The quantity of organs supplied decrease? O The quantity of organs supplied increases from qd to qa O The quantity of organs supplied doesn't change with the imposition of a zero price ceiling. O The quantity of organs supplied decreases from qd to qE O The quantity of organs supplied decreases from qe to qa d. The market supply increase? O The supply of organs decreases from qe to qa The supply of organs increases from qd to ga O The supply of organs decreases from qd to qE. O The supply of organs doesn't change with the imposition of a zero price ceiling. e. The equilibrium price change? O The equilibrium price does not change. O The equilibrium price increases. O The equilibrium price decreases.
When a price ceiling of zero is imposed on the organ market, by how much does a. The quantity of organs demanded increase? O The quantity of organs demanded doesn't change with the imposition of a zero price ceiling. O The quantity of organs demanded increases from qa to ad O The quantity of organs demanded increases from qe to ad The quantity of organs demanded increases from qa to qE b. The market demand increase? O The demand for organs increases from qa to qE O The demand for organs increases from qe to ad O The demand for organs doesn't change with the imposition of a zero price ceiling. O The demand for organs increases from qa to ad c. The quantity of organs supplied decrease? O The quantity of organs supplied increases from qd to qa O The quantity of organs supplied doesn't change with the imposition of a zero price ceiling. O The quantity of organs supplied decreases from qd to qE O The quantity of organs supplied decreases from qe to qa d. The market supply increase? O The supply of organs decreases from qe to qa The supply of organs increases from qd to ga O The supply of organs decreases from qd to qE. O The supply of organs doesn't change with the imposition of a zero price ceiling. e. The equilibrium price change? O The equilibrium price does not change. O The equilibrium price increases. O The equilibrium price decreases.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:**Decisions for Tomorrow**
Refer to the figure to answer five questions.
**Graph Explanation:**
The graph illustrates the market dynamics of organ supply and demand. It is a standard supply and demand curve analysis with the following components:
- **Axes:**
- The vertical axis represents the **Price (per organ)**.
- The horizontal axis represents the **Quantity (organs per year)**.
- **Curves:**
- The **Market demand** curve is the downward sloping green line. It shows the relationship between the price of organs and the quantity demanded, indicating that as price decreases, demand increases.
- The **Market supply** curve is the upward sloping blue line. It represents the relationship between the price of organs and the quantity supplied, indicating that as price increases, supply increases.
- **Equilibrium:**
- The point where the supply and demand curves intersect is the **equilibrium point**. This is labeled as \((q_E, P_E)\).
- \(P_E\) is the equilibrium price, and \(q_E\) is the equilibrium quantity.
- At this point, the market is in balance, meaning the quantity of organs demanded equals the quantity supplied.
- **Additional Points:**
- \(q_a\) represents a quantity where there is excess demand (or shortage), as it is less than the equilibrium quantity.
- \(q_d\) represents a quantity where there is excess supply (or surplus), as it is greater than the equilibrium quantity.
This graph can be used to analyze how changes in market conditions could affect the organ market's supply, demand, and price levels.
Transcribed Image Text:**Impact of a Zero Price Ceiling on the Organ Market**
**a. How does the quantity of organs demanded increase?**
- ○ The quantity of organs demanded doesn’t change with the imposition of a zero price ceiling.
- ○ The quantity of organs demanded increases from \( q_a \) to \( q_d \).
- ○ The quantity of organs demanded increases from \( q_E \) to \( q_d \).
- ○ The quantity of organs demanded increases from \( q_a \) to \( q_E \).
**b. How does the market demand increase?**
- ○ The demand for organs increases from \( q_a \) to \( q_E \).
- ○ The demand for organs increases from \( q_E \) to \( q_d \).
- ○ The demand for organs doesn’t change with the imposition of a zero price ceiling.
- ○ The demand for organs increases from \( q_a \) to \( q_d \).
**c. How does the quantity of organs supplied decrease?**
- ○ The quantity of organs supplied increases from \( q_d \) to \( q_a \).
- ○ The quantity of organs supplied doesn’t change with the imposition of a zero price ceiling.
- ○ The quantity of organs supplied decreases from \( q_d \) to \( q_E \).
- ○ The quantity of organs supplied decreases from \( q_E \) to \( q_a \).
**d. How does the market supply increase?**
- ○ The supply of organs decreases from \( q_E \) to \( q_a \).
- ○ The supply of organs increases from \( q_d \) to \( q_a \).
- ○ The supply of organs decreases from \( q_d \) to \( q_E \).
- ○ The supply of organs doesn’t change with the imposition of a zero price ceiling.
**e. How does the equilibrium price change?**
- ○ The equilibrium price does not change.
- ○ The equilibrium price increases.
- ○ The equilibrium price decreases.
**Explanation:**
This text explores the effects of a zero price ceiling on organ markets, focusing on how demand and supply quantities might change, as well as the potential impact on equilibrium prices. Each section poses multiple-choice questions to examine these dynamics.
Expert Solution
Step 1: Define price ceiling
"As per our policy, we can provide solutions to the first three sub-parts. Kindly raise the question again for the solution to the other parts."
A market that is governed by producers, the prices tend to be higher. It can create a lot of problems for consumers who might not afford the prices charged by the producers. In such a situation, the government intervenes and reduces the price so that goods become affordable the for most consumers. This is termed as price ceiling.
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