Scenario: Consider a competitive market for baseball hats, a good that is indivisible. The supply and demand in this market are as shown in the following table.

-Refer to the above scenario.If a price control of $4 is imposed on this market,the number of baseball hats traded in this market will be ________.

Question

Scenario: Consider a competitive market for baseball hats, a good that is indivisible. The supply and demand in this market are as shown in the following table.
 
-Refer to the above scenario.If a price control of $4 is imposed on this market,the number of baseball hats traded in this market will be ________.

Quizplus · Accepted Answer

The correct answer is A because at a price of $4, only 3 hats will be traded in the market. This is because the quantity supplied at a price of $4 is 3 hats, and the quantity demanded at a price of $4 is 5 hats. Since the quantity supplied is less than the quantity demanded, the price will rise until the quantity supplied equals the quantity demanded.

Scenario: Consider a Competitive Market for Baseball Hats, a Good