In a competitive market, the market demand is Qd = 60 - 6P and the market supply is Qs = 4P. The full economic price under a price ceiling of $3 is?
The answer is "8", but how do you get there?
The full economic price = price ceiling + Non pecuniary price
Non pecuniary price =
Amount supplied at the price ceiling: 4*3 = 12
The price consumers pay at this supply: 12=60-6P or P = 8
Full economic price = 3+(8-3) = $8
In a competitive market, the market demand is Qd = 60 - 6P and the market...
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