Below, you are provided with the demand and supply schedules for jars of peanut butter. You will use this information to analyze the effect of a price ceiling on the price of a jar of peanut butter, and to identify whether the price ceiling leads to a shortage or a surplus of peanut butter. Price Jars of Peanut Butter Demanded Jars of Peanut Butter Supplied $2.00 2,500 1,000 $2.50 2,250 1,250 $3.00 2,000 1,500 $3.50 1,750 1,750 $4.00 1,500 2,000 Part 4 : Suppose that the government imposes a price ceiling of $2.50 per jar of peanut butter. Does this lead to a shortage of jars of peanut butter? Or a surplus of jars of peanut butter? Or neither? Part 5 : Suppose that the government imposes a price ceiling of $2.50 per jar of peanut butter. If this creates a shortage or surplus of jars of peanut butter (as you identified in Part 4), how large is that shortage or surplus? Part 6 : Suppose that the government imposes a price ceiling of $4.00 per jar of peanut butter. Is this price ceiling set above or below the equilibrium price?
Below, you are provided with the demand and supply schedules for jars of peanut
butter. You will use this information
to
analyze the effect of a
price of a jar of peanut butter, and to identify whether the price ceiling leads to a
shortage or a surplus of peanut butter.
Price Jars of Peanut Butter Demanded Jars of Peanut Butter Supplied
$2.00 2,500 1,000
$2.50 2,250 1,250
$3.00 2,000 1,500
$3.50 1,750 1,750
$4.00 1,500 2,000
Part 4
: Suppose that the government imposes a price ceiling of $2.50 per jar of
peanut butter. Does this lead to a shortage of jars of peanut butter? Or a surplus of
jars of peanut butter? Or neither?
Part 5
: Suppose that the government imposes a price ceiling of $2.50 per jar of
peanut butter. If this creates a shortage or surplus of jars of peanut butter (as you
identified in Part 4), how large is that shortage or surplus?
Part 6
: Suppose that the government imposes a price ceiling of $4.00 per jar of
peanut butter. Is this price ceiling set above or below the
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