Suppose that initially, the gasoline market is in equilibrium. War in the Middle East disrupts imports of oil into the United States shifting the supply curve to S2. The price of gasoline begins to rise, and consumers protest. The government intervenes and sets a price ceiling of $3 per gallon. Use the graph below to answer questions What are the original equilibrium price and quantity? What is the equilibrium price and quantity after the Middle East war begins (S2)? If the price ceiling is imposed, what will occur? A surplus or shortage? Suppose that initially, the gasoline market is in equilibrium. War in the Middle East disrupts imports of oil into the United States shifting the supply curve to S2. The price of gasoline begins to rise, and consumers protest. The government intervenes and sets a price ceiling of $3 per gallon. Use the graph below to answer questions 2a – 2d. How are suppliers affected
- Suppose that initially, the gasoline market is in equilibrium. War in the Middle East disrupts imports of oil into the United States shifting the supply curve to S2. The
price of gasoline begins to rise, and consumers protest. The government intervenes and sets aprice ceiling of $3 per gallon. Use the graph below to answer questions
What are the original
What is the equilibrium price and quantity after the Middle East war begins (S2)?
If the price ceiling is imposed, what will occur? A surplus or shortage?
Suppose that initially, the gasoline market is in equilibrium. War in the Middle East disrupts imports of oil into the United States shifting the supply curve to S2. The price of gasoline begins to rise, and consumers protest. The government intervenes and sets a price ceiling of $3 per gallon. Use the graph below to answer questions 2a – 2d.
How are suppliers affected?
Price ceiling: A price cap is a price control or restriction imposed by a government or group on the amount billed for a product, goods, or service. The government has reportedly set price caps to protect consumers from situations where goods could become prohibitively expensive. A price cap is the legal maximum price you can pay for goods or services. Governments set price caps to keep the prices of essential goods and services affordable.
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