Exhibit 4-9

-Refer to Exhibit 4-9. Suppose that the government imposes a price ceiling at a price of $11. How many fewer units would be exchanged with the price ceiling than in a free market?

Question

Exhibit 4-9
 
-Refer to Exhibit 4-9. Suppose that the government imposes a price ceiling at a price of $11. How many fewer units would be exchanged with the price ceiling than in a free market?

Quizplus · Accepted Answer

At a price ceiling of $11, the quantity supplied is 50 units and the quantity demanded is 100 units. In a free market, the equilibrium price would be $13 and the equilibrium quantity would be 70 units. Therefore, the price ceiling would result in 70 - 50 = 20 fewer units being exchanged.

Exhibit 4-9 -Refer to Exhibit 4-9. Suppose That the Government Imposes a the Government