Question

Question 36 Figure 6-32 Price 20 ELENTEND 10 20 30 40 50 60 70 80 100 Quantity Refer to Figure 6-32. Which of following statements is true based upon the conditions in the market? a shortage will develop when a price ceiling is imposed at a price of S10. a surplus will develop when a price floor is imposed at a price of $8. a surplus will develop when a price floor is imposed at a price of $12. a shortage will develop when a price ceiling is imposed at a price of $14.

Answer 1

- (36) option c a suples will develop when - a price floor is imposed at a pinasof $12 is wrrect option Because al P = $12 which is above the equilibrium price = $10 which lead to supply that Result more than demand suples st obtion B in A decrease to the no of Commucial Baken correct of hon Because the market Supply will shifted when the other factar chouge, other than price and Quaunty. Here no of Bake's 1 supply decloses leftward

(36) Obhan o $10 AB= taxwedge h corred ophon e s LP W 2005 Consunen Surplus - Area of a AAB 3 CA = fx Base x height =ļx BOX CD = 4 x 110-8)(10) = 10 ophon B $100 - i correct ophon Revenue = Tax x import = $10 (25-15) = $100 (see fig)