Suppose that, in a competitive market without government regulations, the equilibrium price of soft tacos is $4 each. Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it is binding o nonbinding.
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- A low-income county decides to set a price ceiling on bread so it can make sure that bread is affordable to the poor. Table 3.11 provides the conditions of demand and supply. What are the equilibrium price and equilibrium quantity before the price ceiling? 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? At 2.00? At 3.50?80 3.70 73 75 4.00 75 70 4.30 77 65 4.60 79 60 4.90 81 Suppose that the government establishes a price ceiling of $3.70 for wheat. a. What might prompt the government to establish this price ceiling? O To control food prices O To use it as a form of trade barrier O To use it as income support for farmers O To encourage production b. In the diagram below, demonstrate a price ceiling of $3.70. Instructions: Use the tool provided 'Ceiling' to demonstrate a price ceiling of $3.70 for wheat. Plot only the endpoints of the line (2 points total). 5.2 Tools 4.9 Ceiling 4.6 4.3 (75,4.5) 4.0 3.7 3.4 3.1 55 60 65 70 75 80 85 90 Quantity (thousands of bushels) c. Next, suppose that the government establishes a price floor of $4.60 for wheat. What will be the main effect of this price floor? O It will eliminate the market for wheat. O It will create a surplus. O It will create a shortage. O It will establish the equilibrium quantity. Price per bushel ($)Price $8.00 7.00 6.00 5.00 4.00 30 40 50 6O 70 Quantity Refer to Figure 4-17. Which of the following price controls would cause a shortage of 10 units of the good? O a price ceiling of $5.50 O a price floor of $5.50 O a price ceiling of $6.50 a price floor of $6.50
- 1) Listen After weather system Derecho produccrs were accused of pricé gouging because bottled water skyrocketed in price. Consumers clamored for price controls to be implemented to keep the price of bottled water at pre- Derecho levels. What are the economic conscquences of the government placing a price ceiling on bottled water at the previqus price? Please explain.hello, can explain to me how to solve the question step by step? TQ Suppose the cable TV industry is currently unregulated. However, due to complaints from consumers that the price of cable TV is too high, the legislature is considering placing a price ceiling on cable TV below the current equilibrium price. Assuming the government does make this price ceiling law, please construct a diagram that shows the impact of this law on the cable TV market, and please briefly explain the effects on market prices and quantities with supply and demand analysis. Also, if the cable TV company is worried about disgruntling customers, the company may introduce a different type of programming that is cheaper for the company to provide yet is equally appealing to customers. What would be the effects of this action? 1.Harding Enterprises has developed a new product called the Gillooly Shillelagh. The market demand for this product is given as follows: Q=240 - 4P a. At what…8. Suppose the total demand for wheat and the total supply of wheat per month in the Kansas City grain market are as shown in the table below. Suppose that the government estab- lishes a price ceiling of $3.70 for wheat. What might prompt the government to establish this price ceiling? Explain care- fully the main effects. Demonstrate your answer graphically. Next, suppose that the government establishes a price floor of $4.60 for wheat. What will be the main effects of this price floor? Demonstrate your answer graphically. LO3.6 Thousands of Bushels Thousands of Demanded Price per Bushel Bushels Supplied 85 $3.40 72 80 3.70 73 75 4.00 75 70 4.30 77 65 4.60 79 60 4.90 81
- 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 $5.00.1. Use the data from the chart above. If you are a seller in this business, what would happen tomarket supply if the government sets a price ceiling below P30?please show the consumer surplus and producer surplus in the graph 13. Refer to Figure 6-7. Which of the following price controls would cause a shortage of 20 units of the good? a. a price ceiling set at $6 b. a price ceiling set at $5 c. a price floor set at $9 d. a price floor set at S8 Figure 7-19 Price Ayddns 15 70 65 60 55 45 35 30 25+ 20+ 15 10 Demand i à is is 16 n1 21 22 23 a 25 Deannty 14. Refer to Figure 7-19. If the govermment imposes a price ceiling of $55 in this market, then total surplus will be a. S187.50. b. S125.00. c. $250.00. d. $266.67.
- Figure 6-14 24 Price 21+ 18- 15 12- 9 6 3 Supply Daud 20 40 60 80 100 120 140 160 180 Quantity Refer to Figure 6-14. If the horizontal line on the graph represents a price ceiling, then the price ceiling is a) not binding, and there will be no surplus or shortage of the good. b) binding and creates a shortage of 40 units of the good. c) not binding but creates a shortage of 40 units of the good d) binding and creates a shortage of 20 units of the good.It is an illegal market that emerges when binding and nonbinding price controls are in place. It is an illegal market that emerges when binding price ceilings are in place. O It is an illegal market that emerges when binding price floors are in place. It is an illegal market that emerges when only binding price ceilings and binding price floors are in place.. It is an illegal market that em erges when no price controls are present. Save Question 10 You would expect there to be many customers for a black market good when the opportunity cost of finding the good under a: O binding price floor is high. binding price floor is low. nonbinding price ceiling is high. binding price ceiling is low. binding price ceiling is high.Use the following graph to answer the following question: Price ($) 40 25 15 8. Quantity 15 25 50 75 100 200 Refer to the graph above. Suppose that the government imposes a price ceiling at $15. As a result, the market will experience O No surplus or shortage; only equilibrium O A shortage of 25 units O A shortage of 50 units O A surplus of 50 units