Suppose the market for Mexican food in your neighborhood was in equilibrium.a. Draw a diagram showing the demand and supply curve for Mexican food. Indicate the market equilibrium quantity and price in this market.b. Suppose the government imposed a binding price ceiling in this market, with the goal of making Mexican food affordable to most residents. Add the price ceiling to your diagram, and then identify the quantity demanded and quantity supply in this market with the price ceiling.c. Would the government be able to make Mexican food affordable to most people with the price ceiling? Explain your answer using the diagram you drew in part (b).

What will be an ideal response?


Figure 2.6 in the text illustrates this problem if Mexican food is substituted for housing. Because less is supplied fewer people have the food.

Economics

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Economics

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What will be an ideal response?

Economics