Question

Un bong sa an ninu Dan saline D O CES 10. Recent cold weather has significantly increased the demand for propane and thus its price. The governor has declared "price gouging" laws in effect, thus you cannot increase the price in response to the situation. What are the implications?

Answer 1

Answer 10. Increase in demand for propane will shift the demand curve to the right. This will lead to rise in price of propane.

Due to price gauging, the price cannot be increased and supply is also fixed. So at the previous prices, demand will be greater than supply. This leads to shortage in the market for propane.

Q^~

Demand rises from D to D'.

Price rises from P* to P' and quantity rises from Q* to Q'.

At previous price of P*, Quantity demanded is more than Quantity supplied. So there is shortage in the market.

If it helps kindly upvote

For doubts comment below