Market demand is given as Q_D= 280 - 4P.Market supply is given as Q_S= 2P + 40.Which legally imposed price would constitute a binding price floor

Name: Market demand is given as Q D = 280 - 4P.Market supply is given as Q S = 2P + 40.Which legally imposed price would constitute a binding price floor
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Question

Quizplus · Accepted Answer

A binding price floor is set above the equilibrium price. Solving for equilibrium, set QD = QS: 280 - 4P = 2P + 40, which gives P = 40. A price floor of $50 is above this equilibrium price, making it binding.

Market Demand Is Given as QD = 280 - 4P

Market Demand Is Given as Q_D= 280 - 4P