Suppose the government decides to impose a binding price ceiling on the market. 1. Please place the Price Ceiling line segment t
o ustrate this Price Ceiling 2. After the price ceiling is implemented, what exists A shortage Supply O A surplus O Both O Neither 3. Shade in the deadweight loss (DWL) that arises due to the price ceiling. Demand Quantity
1 answer:
Answer: After price ceiling is implemented a shortage supply exists if the price ceiling is below the market price
Explanation:
price ceiling is wen the government imposes the maximum price that should be charged for a good or service. The effects of price ceiling depends on whether government sets the maximum price that should be charged for a good or service below or above the market price,
if the government sets the price above the market price, price ceiling will not affect the market, however if the the government sets the price below the market price price ceiling will cause changes in the quantity demanded and quantity supplied.
Please refer to the attachment, in the attachment we see a market that is in Equilibrium and operating efficiently at price P' and Quantity demanded and supply is Q'. when government sets price ceiling below the market price (below P') the quantity demanded will increase to Qdem while quantity supplied decreases to Qsup. This will cause a shortage in the market because quantity demanded is higher than quantity supplied thus creating a Dead weight loss labelled by " DWL "
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Answer:
The question is missing the options which can be found in the attached.
The correct option is banker's acceptance
Explanation:
Banker's acceptance is a guarantee by a bank to the exporting party to pay a sum of money at specific date.
In international business, exporters would require additional security against their receivable usually request for a banker's acceptance also known as bill of exchange.
The bank pays the exporter a discounted amount as agreed then chase the importer for the full value of the transaction.The difference between the discounted amount paid by the bank and the full value recoverable from the importer is the bank's margin.
