Refer to the figure to answer the following two questions. P 165 150 S 135 120 105 90 75 60 45 30 15 Q 0 80 160 240 320 400 480 560 640 720 800 880 1) If the government imposes a binding price floor of $135.00 in this market, what is the result? a. There will be al of units. b. The redistribution of surplus from consumers to the producer is equal to $ c. The deadweight loss due to price floor is $ 2) If the government imposes a binding price ceiling of $15.00 in this market, what is the result? a. There will be a of units. b. The highest price that would be charged in a black market is $ c. The deadweight loss due to price ceiling is $

Refer to the figure to answer the following two questions. P 165 150 S 135 120 105 90 75 60 45 30 15 Q 0 80 160 240 320 400 480 560 640 720 800 880 1) If the government imposes a binding price floor of $135.00 in this market, what is the result? a. There will be al of units. b. The redistribution of surplus from consumers to the producer is equal to $ c. The deadweight loss due to price floor is $ 2) If the government imposes a binding price ceiling of $15.00 in this market, what is the result? a. There will be a of units. b. The highest price that would be charged in a black market is $ c. The deadweight loss due to price ceiling is $

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

Section: Chapter Questions

Problem 3CQQ

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Figure 6-8 IS 7- 5 10 15 20 25s 35 40 so ss 0 6S T0 7s 30 8S yowity 6. Refer to Figure 6-8. When a certain price control is imposed on this market, the resulting quantity of the good that is actually bought and sold is such that buyers are willing and able to pay a maximum of P, dollars per unit for that quantity and sellers are willing and able to accept a minimum of P; dollars per unit for that quantity. If P, - P2 = $3, then the price control is a. a price floor of $5.00. b. a price ceiling of $5.00. c. a price ceiling of $2.00. d. either a price ceiling of $2.00 or a price floor of $5.00.
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