Consider a market for fish whose market demand and market supply for fish are specified as Qd = 300 - 2.5 P and Qs = - 20 + 1.5 P respectively.The government decides to impose a price ceiling of $50 per ton.What would be the resulting market distortion?
A)Shortage of 120 tons of fish
B)Shortage of 175 tons of fish
C)Surplus of 120 tons of fish

Question

Quizplus · Accepted Answer

At a price ceiling of $50, Qd = 300 - 2.5(50) = 175 and Qs = -20 + 1.5(50) = 55. The shortage is Qd - Qs = 175 - 55 = 120 tons.

Consider a Market for Fish Whose Market Demand and Market