Assume the market is initially in equilibrium at point A. Then assume the city imposes a price ceiling of pz
Consider the market for apartments in New York City illustrated in the figure below. Assume the market is initially in equilibrium at point A. Then assume the city imposes a price ceiling of pz. How does this affect the market?
The price ceiling results in a shortage of apartments
The price ceiling results in an equilibrium where supply equals demand.
The price ceiling is not binding and has no effect
The price ceiling results in a surplus of apartments
Homework Answers
ANSWER:
When ceiling of p2 is imposed then the demand at p2 is more then the supply at p2 and hence there will be shortage of apartments and hence option a is the right answer.
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Assume the market is initially in equilibrium at point A. Then assume the city imposes a price ceiling of pz
Then assume the government imposes a price floor of p2. How does this affect the market?
Consider the market for soybeans illustrated in the figure below. Assume the market is initially in equilibrium at point A. Then assume the government imposes a price floor of p2. How does this affect the market?The price floor results in an equilibrium where supply equals demand. The price floor results in a surplus of corn. The price floor is not binding and has no effect The price floor results in a shortage of corn
If the City of New York imposes a rent conrtol on apartments that is below the...
If the City of New York imposes a rent conrtol on apartments that is below the market equilibrium price, a surplus will develop. a shortage will develop. producers will reduce their sales price. consumers will reduce their demand for the good. q20
Consider a market in which the government imposes a price ceiling. Assume that neither supply nor...
Consider a market in which the government imposes a price ceiling. Assume that neither supply nor demand is perfectly elastic nor perfectly inelastic. Which of the following groups will always gain from a price ceiling? Consumer Producers The government Society as a whole, because total surplus will increase No group will always gain from a price ceiling
Question 29 The market equilibrium is at price $11/hour. The government imposes a minimum wage of...
Question 29 The market equilibrium is at price $11/hour. The government imposes a minimum wage of $14. The new equilibrium will be ? A. Not binding and we will have neither a surplus nor a shortage. B. Binding and we will have a surplus. C.Not binding and we will have a shortage D.Binding and we will have a shortage.
5. Consider the market for one-bedroom apartments in a large city, suppose the demand and supply...
5. Consider the market for one-bedroom apartments in a large city, suppose the demand and supply for apartments in this city are given by the following equations: Q = 70,000 – 60R Q = -32,000 + 110R Where R is the rental price of an apartment in this city measured in dollars, Q is the quantity of apartments demanded and the number of apartments landlords are willing to rent out in this city. i. Find the market rent and equilibrium...
When a government imposes a price ceiling below the market price on a product or service,...
When a government imposes a price ceiling below the market price on a product or service, which of the following happens? a.Total consumer surplus rises because consumers now pay less for the product b.The total amount of the product or service that is traded in the market rises due to the lower price c.A shortage of supply relative to demand results A per unit tax on a good which is levied on the consumer will usually cause which of the...
Question 3: Consider the market for after school daycare where the demand is given by Qº...
Question 3: Consider the market for after school daycare where the demand is given by Qº = 100 – 2P and the supply is given by Q = 5P. a What is the equilibrium price and quantity in this market? Show it on a graph. b Suppose the government is debating placing a price ceiling to help consumers. At what prices will the price ceiling have an effect on the market? c Pick a price where the price ceiling is...
Consider the following equations: SUPPLY: Q=10+2P DEMAND: Q=60-3P b) If the government imposes a ceiling price...
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This assignment asks you to solve for equilibrium in a market and then look at the impact of a price ceiling, a price floor and a tax. The correct answers to these questions will vary across students. This is because the numerical values of some parameters are dependent on your student members. Suppose supply and demand for pizza are given by: Q" = 110 - OP QS = BP If the last digit of your student number is not 0,...
Question 29 The market equilibrium is at price $11/hour. The government imposes a minimum wage of $14. The new equilibrium will be ? A. Not binding and we will have neither a surplus nor a shortage. B. Binding and we will have a surplus. C.Not binding and we will have a shortage D.Binding and we will have a shortage.
Question 3: Consider the market for after school daycare where the demand is given by Qº = 100 – 2P and the supply is given by Q = 5P. a What is the equilibrium price and quantity in this market? Show it on a graph. b Suppose the government is debating placing a price ceiling to help consumers. At what prices will the price ceiling have an effect on the market? c Pick a price where the price ceiling is...
This assignment asks you to solve for equilibrium in a market and then look at the impact of a price ceiling, a price floor and a tax. The correct answers to these questions will vary across students. This is because the numerical values of some parameters are dependent on your student members. Suppose supply and demand for pizza are given by: Q" = 110 - OP QS = BP If the last digit of your student number is not 0,...
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