Question 27Why are binding price floor laws passed?O They make goods available to the largest number of customers.O They discourage the formation of illegal black markets.O They make goods less expensive.O They help producers receive higher prices for products sold in the legal market.O They encourage producers to produce goods in the most cost-efficient fashion.

A price floor is a government regulation whose objective is to control the price from falling to a…

Answered: Why are binding price floor laws…

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

Section: Chapter Questions

Problem 2QCMC

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Current Stats for Gasoline: Government Enforced Price Ceiling - $4.50/gallon Current Market Equilibrium - $3.00/gallon OPEC, the largest global supplier of oil used to make gasoline, has decided to reduce output by 50%. This policy change is expected to drive up the cost of gasoline to $5.00/gallon. How does that price change interact with the price ceiling? A. Changes the Price Ceiling from Binding to Non-Binding B. Disrupts Oil Supply C. Changes the Price Ceiling from Non-Binding to Binding D. No Change
Suppose demand and supply are given by Qd = 60 − P and Qs = P − 20. a. What are the equilibrium quantity and price in this market? b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $50 is imposed in this market. c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $32 is imposed in this market. Also, determine the full economic price paid by consumers.
Consider a market equilibrium is a price = $2 and quantity = 100 units in the market for hand sanitizer. Based on this information, answer the next three questions. What could the price in this market be if the government implemented an effective price ceiling? Will there be any excess supply or demand? Provide at least one more example of how consumers or producers will respond to the price control (think unintended consequences).
Consider a market where demand and supply satisfy the following equations QD = 12 – 2 P, QS = 2P. Find the current equilibrium price and quantity. 2.What is the total producer surplus if the market is in equilibrium? The government is considering a minimum price policy to increase producer surplus. 3.Explain by means of graphs how the introduction of a price floor can increase producer surplus. 4.Find the (optimal) price floor that maximizes producer surplus. Please answer question 4, thank you.
Consider a market where demand and supply satisfy the following equations QD = 12 – 2 P, QS = 2P. Find the current equilibrium price and quantity What is the total producer surplus if the market is in equilibrium? The government is considering a minimum price policy to increase producer surplus. Explain by means of graphs how the introduction of a price floor can increase producer surplus. Find the (optimal) price floor that maximizes producer surplus.
Question 13 The equilibrium price of a good is $6 with no price controls. If a price floor of $8 is imposed, there will be Group of answer choices an indeterminate result. a shortage in the market. a surplus in the market. no surplus or shortage.
Which of the following would increase quantity supplied, increase quantity demanded, and decrease the price that consumers pay?a. the imposition of a binding price floorb. the removal of a binding price floorc. the passage of a tax levied on producersd. the repeal of a tax levied on producers
Suppose demand and supply are given by Qd = 60 - P and Qs = P - 20.a. What are the equilibrium quantity and price in this market?Equilibrium quantity: Equilibrium price: $b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $50 is imposed in this market.Quantity demanded: Quantity supplied: Surplus: c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $32 is imposed in the market. Also, determine the full economic price paid by consumers.Quantity demanded: Quantity supplied: Shortage: Full economic price: $
Indian government realized free market price of wheat is very low. To increase farmers’ welfare government took the following steps: a) Suppose the government imposes a binding price floor in the wheat market. How this policy will affect the price, quantity demanded and quantity supplied of wheat. b) Wheat farmers complained that this binding price floor reduced their revenue. Explain how it reduced their revenue. c) In response to wheat farmers’ complaints, government purchases all the surplus quantity at the minimum price decided by the government. Who are the beneficiaries and who loses due to this price floor?
Question 12 The equilibrium price of a good is $4 with no price controls. The price of the good would continue to serve as the rationing mechanism (i.e., the control would not be "binding") if Group of answer choices a price floor of $5 is imposed. All of the above are correct. a price ceiling of $3 is imposed. a price ceiling of $5 is imposed.

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