A market's demand and supply curves are given by:
Q_d = 400 - 3P
Q_s = 100 + 2P
where Q_d is quantity demanded, Q_s quantity supplied, and P is the price.
a. Suppose the government enacts a price ceiling of $60. What is the quantity demanded and supplied? Is the market characterized by a shortage?
b. Suppose that supply conditions in the market change to Q_s = 80 + 2P. Given the price ceiling of $60, what happens to quantity demanded and quantity supplied? Is the market characterized by a shortage? How much are consumers willing to pay per unit for the quantity transacted?

Question

Quizplus · Accepted Answer

The Answer of A market's demand and supply curves are given by: Q_d = 400 - 3P Q_s = 100 + 2P where Q_d is quantity demanded, Q_s quantity supplied, and P is the price. a. Suppose the government enacts a price ceiling of $60. What is the quantity demanded and supplied? Is the market characterized by a shortage? b. Suppose that supply conditions in the market change to Q_s = 80 + 2P. Given the price ceiling of $60, what happens to quantity demanded and quantity supplied? Is the market characterized by a shortage? How much are consumers willing to pay per unit for the quantity transacted?

A Market's Demand and Supply Curves Are Given By