Table 6-4 The Following Table Contains the Demand Schedule and Supply Schedule

question 347

Multiple Choice

Table 6-4
The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $3 above the equilibrium price in this market.
-Refer to Table 6-4. Following the imposition of a price floor $3 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting shortage is

• A)0 units.
• B)4 units.
• C)5 units.
• D)10 units.

Calculate the effect of price changes using the midpoint formula.

Grasp the concept of price elasticity of demand being different at every point on a linear demand curve.

Recognize how the availability of substitutes affects the price elasticity of demand.

Understand the role of time in determining the elasticity of demand.