FIGURE 5- 3
-Refer to Figure 5- 3. P2 represents a price imposed by the government. What is the quantity of this good that would be exchanged in the market?

Question

Quizplus · Accepted Answer

P2 is a price ceiling imposed by the government, which means that it is below the equilibrium price (P0). This results in quantity demanded (Q2) exceeding quantity supplied (Q1), creating a shortage. The quantity of the good that would actually be exchanged in the market is the smaller of Q1 and Q2, which is Q1.

FIGURE 5- 3 -Refer to Figure 5- 3. P2 Represents a Price Imposed