5. Suppose the market shown below. a. Suppose now that the government decides to introduce a price FLOOR above the equilibrium price. How would that affect the market? Draw the change on the graph below. b. What is the new quantity demanded (label it Qd)? What is the new quantity supplied (label it Qs)? What is the new quantity exchanged? What is the new price at which the good is exchanged? c. Indicated whether the market is in equilibrium, or whether there is a surplus or shortage.

5. Suppose the market shown below. a. Suppose now that the government decides to introduce a price FLOOR above the equilibrium price. How would that affect the market? Draw the change on the graph below. b. What is the new quantity demanded (label it Qd)? What is the new quantity supplied (label it Qs)? What is the new quantity exchanged? What is the new price at which the good is exchanged? c. Indicated whether the market is in equilibrium, or whether there is a surplus or shortage.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter3: Demand And Supply

Section: Chapter Questions

Problem 1SCQ: Review Figure 3.4. Suppose the price of gasoline is 1.60 per gallon. Is the quantity demanded higher...

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