Suppose demand is given by Q^d = 500 - 15P and supply is given by Q^s = 5P. If the government imposes a $15 price ceiling, the excess demand will be A) 200 B) 225 C) 250 D) 275

Question

Quizplus · Accepted Answer

At a price ceiling of $15, quantity demanded is Q^d = 500 - 15(15) = 250, while quantity supplied is Q^s = 5(15) = 75. Excess demand is 250 - 75 = 175.

Suppose Demand Is Given by Qd = 500 - 15P

Suppose Demand Is Given by Q^d = 500 - 15P