Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter P2, Problem 8KC
To determine
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In India, to protect the farmers from the low price, the government decided to increase the price of farm products. Accordingly, the government increased the price and fixed the price above the equilibrium price. What do you call this type of pricing?
a.
Price ceiling
b.
Market price
c.
Maximum price
d.
Price floor
A price below the equilibrium price and quantity between demand and supply will lead to what?
1. What is a good or service that you think should have a price ceiling (maximum price)
2. What is a good or service that you think should have a price floor (minimum price)
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- The following graph shows market for printers at equilibrium at price of $100 and quantity of 100. A. Determine the effects of a $90 price ceiling on quantity demanded, quantity supplied, and quantity exchanged in the market. B. As a result of this price ceiling there will be how much shortage or Surplus in this market? C. Show the effects of the price ceiling on the graph. You can draw the graph on paper and upload an image as a PNG, JPEG or PDF document. Please keep in mind that I can not open the files with HEIC extension. D. Show the deadweight loss of the price ceiling on your graph. P 130 120 110 100 S 90 80 70 60 50 40 50 60 70 80 90 100 110 120 Q Darrow_forwardThe following table summarizes information about the market for principles of economics textbooks: Price Quantity Demanded per Year Quantity Supplied per Year $45 4,300 300 55 2,300 700 65 1,300 1,300 75 800 2,100 85 650 3,100 What is the market equilibrium price and quantity of textbooks? To quell outrage over tuition increases, the college places a $55 limit on the price of textbooks. How many textbooks will be sold now? While the price limit is still in effect, automated publishing increases the efficiency of textbook production. Show graphically the likely effect of this innovation on the market price and quantity.arrow_forwardWhat is price legislation?arrow_forward
- Suppose that a new scientifie study is published that demonstrates that eating apples slows aging. How will this affect the equilibrium price and quantity in the market? a. The equilibrium price will increase and the equilibrium quantity will decrease. b. The equilibrium price will decrease and the equilibrium quantity will increase. c. Both the equilibrium quantity and price will increase. d. Both the equilibrium quantity and price will decrease.arrow_forwardDiscuss the following: 1. Shortage 2. Surplus 3. Equilibrium 4. Pricearrow_forwardThe addition of 39 new drugs in “National List of Essential Medicines” by Indian government is an example of a. Price floor b. Equilibrium price c. Price discrimination d. Price ceilingarrow_forward
- Describe in your words : Shortage and Surplus Price Floor and Price Ceilingarrow_forwardUse the supply and demand schedules below to answer the following questions: Price $ 25 30 35 40 45 Quantity Demanded 80 65 50 35 20 Quantity Supplied 20 35 50 65 80 Instructions : Enter your answers as a whole number . a. What is the market equilibrium price and quantity? Market equilibrium price : $ Market equilibrium quantity : units b. What is the market price if there is a shortage of 30 units ? At a price of $40the market experiences a (Click to select) units.arrow_forwardPlease have a lookarrow_forward
- WHEN DO YOU SAY THAT THERE IS EXCESS SUPPLY FOR A COMMODITY IN THE MARKET?arrow_forwardWill consumers benefit with the price floor?arrow_forwardYou have been given the following information about the housing market for two- bedroom rental units in Vancouver: Rent ($ per Quantity Demanded (per month) Quantity Supplied (per month) month) 1,100 20,000 1,200 15,000 5,000 1,300 10,000 10,000 1,400 5,000 15,000 1,500 2,500 20,000 1,600 1,500 25,000 a. Draw a supply and demand graph to illustrate the housing market above. Answer: b. What is the equilibrium rental price and the equilibrium quantity of housing? Answer: c. Suppose that a price ceiling of $1,200 rent per month is imposed in the Vancouver housing market, what will be the effect of this on housing market in Vancouver? Answer:arrow_forward
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