if government were to impose a price ceiling or 6, which statement is correct
Homework Answers
Answer
The market is in equilibrium at Qd=Qs=30 and P=$9
the Pe>Pc
so the price ceiling is effective e and decreases market price and
increases demand but the supply decreases so there is a
shortage
shortage=Qd-Qs=40-20=20 units
Dead weight loss=0.5*(12-6)*(30-20)=30
the Producer surplus decreases after price ceiling.
Option first.
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if government were to impose a price ceiling or 6, which
statement is correct
Question 19...
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