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11 months ago

How does a price floor set above the equilibrium price affect quantity demanded and quantity supplied?

1 answer:

5 0

When the price floor is set above the equilibrium price, the quantity supplied exceeds the quantity demanded, creating an oversupply or surplus. When government laws regulate prices instead of letting market forces set prices, this is the equilibrium price affect quantity demanded and quantity supplied.

If demand does not change, there is an inverse relationship between supply and price of goods and services. When the supply of goods and services increases at the same demand, prices tend to fall resulting in lower equilibrium prices and higher equilibrium quantities of goods and services.

Setting the price cap below the equilibrium price causes demand to exceed supply, resulting in overdemand or shortage. A floor price prevents the price from falling below a certain level.

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Explanation:

The Journal entry is shown below:-

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To accounts payable $4,700

(Being Purchase of merchandise is recorded)

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To Merchandise inventory $1,600

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Suppose you borrowed $25,000 at a rate of 8% and must repay it in 4 equal installments at the end of each of the next 4 years. h

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Oliga [24]

Answer:

$44,955.10

$38,131.84

Explanation:

Present value is the sum of discounted cash flows

Present value can be calculated using a financial calculator

Investment X

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I = 7%

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Investment Y

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To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

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Answer:

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