Answered: (28) If demand increases and supply…

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter4: Prices: Free, Controlled, And Relative

Section: Chapter Questions

Problem 4WNG

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Question

(27)

Refer to the figure below. If the government sets a price ceiling at $10, there would be a(n):

Select one:

a. shortage of 24 units.

b. excess supply of 32 units.

c. excess supply of 80 units.

(28)

If demand increases and supply remains constant, what happens to the market equilibrium?

Select one:

a. Quantity rises and price falls.

b. Quantity and price both rise.

c. Quantity and price both fall.

Definition Video Formula Definition Phenomenon in which market supply and demand balance each other. Market equilibrium is the economic state in which the market demand curve intersects the market supply curve, giving us the equilibrium price and equilibrium quantity for which a commodity can be sold and purchased in an economy. When market equilibrium is achieved, it suggests that all resources have been allocated efficiently and that there is just a distribution of income and resources in the economy. Video Formula

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