Q1
Answer
A price floor is a minimum price a producer gets and it is effective if it is above equilibrium.
the market is in equilibrium at Qd=Qs
Where
P=$4
As the price is above equilibrium so the Qd<Qs
Qd=40 and Qs=55
surplus =Qs-Qd=55-40=15 units
Option a
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Q2
Answer
Option a
The supply curve shifts upward by the amount of the tax.
Q2
Answer
Option a
The supply curve shifts upward by the amount of the tax.
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