A Market's Demand and Supply Curves Are Given by

question 92

Essay

A market's demand and supply curves are given by where Qd is quantity demanded, Qs quantity supplied, and P is the price. a. Suppose the government enacts a price ceiling of $60. What is the quantity demanded and supplied? Is the market characterized by a shortage? b. Suppose that supply conditions in the market change to Qs = 80 + 2P. Given the price ceiling of $60, what happens to quantity demanded and quantity supplied? Is the market characterized by a shortage? How much are consumers willing to pay per unit for the quantity transacted?

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