If the demand curve of a market is P = 14 - Q and the supply curve is P = 2 + 2Q, but a price ceiling of 6 is imposed, what will the shortage be?
What will be an ideal response?
Quantity demanded will be 8 and the quantity supplied will be 2 so the shortage is 6.
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Economic advisers who fear that the economy is growing too rapidly would recommend that the government decrease spending and/or increase taxes
Indicate whether the statement is true or false
What is a cap-and-trade policy? (Be certain to mention marketable permits.) Suppose there are two firms in an area, each emitting tons of sulfur
The government decides on a target level of 200 tons of sulfur, and gives each firm a permit to emit 100 tons of sulfur. Suppose Firm A is very efficient and can reduce pollution by 100 tons with an abatement cost of $500. Firm B has an older plant, so it will cost Firm B $1,000 to reduce emissions by 100 tons. What will occur with marketable permits?
Firms that emit toxins into the air:
a. underproduce because the private cost of production exceeds the social cost. b. overproduce because the social cost of production exceeds the private cost. c. produce the same as nonpolluting firms. d. produce at the socially optimal amount.
The two largest economies in the world in 2012 were:
A. China and the U.S. B. England and the U.S. C. Japan and the U.S. D. China and Germany.