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QUESTION 10 A low-income country decides to set a price ceiling on bread so they can make sure that bread is affordable to the poor. conditions of demand and supply are given in the table below. Price Qd Qs $1.60 9,000 5,000 $2.00 8,500 5,500 $2.40 8,000 6,400 $2.80 7,500 7,500 $3.20 7,000 9,000 $3.60 6,500 11,000 $4.00 6,000 15,000 What is the equilibrium price before the price ceiling? | (include decimal point) What is equilibrium quantity before the price ceiling? (exclude comma, whole number on What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling $2.40? What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling at $2.00? What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling at $3.60?

QUESTION 10 A low-income country decides to set a price ceiling on bread so they can make sure that bread is affordable to the poor. conditions of demand and supply are given in the table below. Price Qd Qs $1.60 9,000 5,000 $2.00 8,500 5,500 $2.40 8,000 6,400 $2.80 7,500 7,500 $3.20 7,000 9,000 $3.60 6,500 11,000 $4.00 6,000 15,000 What is the equilibrium price before the price ceiling? | (include decimal point) What is equilibrium quantity before the price ceiling? (exclude comma, whole number on What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling $2.40? What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling at $2.00? What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling at $3.60?

Microeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter3: Demand, Supply, And The Market Process
Section: Chapter Questions
Problem 1CQ
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QUESTION 10 A low-income country decides to set a price ceiling on bread so they can make sure that bread is affordable to the poor. The conditions of demand and supply are given in the table below. Price Qd Qs $1.60 9,000 5,000 $2.00 8,500 5,500 $2.40 8,000 6,400 $2.80 7,500 7,500 $3.20 7,000 9,000 $3.60 6,500 11,000 $4.00 6,000 15,000 What is the equilibrium price before the price ceiling? | (include decimal point) What is equilibrium quantity before the price ceiling? (exclude comma, whole number only) What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling is set at $2.40? What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling is set at $2.00? What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling is set at $3.60?
Transcribed Image Text:QUESTION 10 A low-income country decides to set a price ceiling on bread so they can make sure that bread is affordable to the poor. The conditions of demand and supply are given in the table below. Price Qd Qs $1.60 9,000 5,000 $2.00 8,500 5,500 $2.40 8,000 6,400 $2.80 7,500 7,500 $3.20 7,000 9,000 $3.60 6,500 11,000 $4.00 6,000 15,000 What is the equilibrium price before the price ceiling? | (include decimal point) What is equilibrium quantity before the price ceiling? (exclude comma, whole number only) What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling is set at $2.40? What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling is set at $2.00? What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling is set at $3.60?
Expert Solution
Step 1

At equilibrium, demand curve intersects the supply curve. At this point there is no shortage or no surplus. Price ceiling refers to the maximum legal price that can be charged for a good. 

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