Question

Exhibit 4-9 Price of Good X Quantity Demanded Quantity Supplied $10 220 90 11 200 100 12 180 130 13 150 150 14 120 190 15 80 260 Refer to Exhibit 4-9. Suppose that the government imposes a price ceiling at a price of $11. How many fewer units would be exchanged at the price ceiling than would be exchanged at the equilibrium price?

Answer 1

Answer:

The market of good X will experiment a decrease of 50 units in the untis available as will drop to 100 units from 150

Explanation:

Price Qd Qs

10       220 90

11       200 100

12        180  130

13        150 150

14        120 190

15        80 260

At a celling of $11 dollars the people would demand for 200 untis but suppliers will only be willing to produce and sell 100 untis.

The equilibrium price of $13 match for 150 units

Therefore,the decrease will be 50 units