Use the following information to answer the following questions.
Market for used cars:
Demand: Q d = 154,000 - 86P
Supply: Q s = -100 + 14P
-What would be the quantity supplied if a price ceiling is set at $2,000?
A) 100
B) 154,100
C) 27,900
D) 21,474
E) 18,000

Question

Quizplus · Accepted Answer

To find the quantity supplied at a price ceiling of $2,000, we need to set Q_d = Q_s and solve for P. 154,000 - 86P = -100 + 14P 240P = 154,100 P = $642.50 Now, we can substitute this price into either the demand or supply function to find the quantity. Q_d = 154,000 - 86($642.50) = $96,550 Q_s = -100 + 14($642.50) = $8,925 The quantity supplied is the lower value of the two, which is 8,925. Therefore, the best choice is C.

Use the Following Information to Answer the Following Questions