Question

8. The following graph represents the market for donuts. Suppose the government implements a price ceiling of $5 per box of a dozen donuts. (4 pts.) Price Market for Donuts $6.50 $5.00 ---- 361 Quantity (dozen) a. What price will suppliers sell a box a dozen donuts? b. Will the market have a shortage or surplus of donuts? Or, will the market remain in equilibrium? C. Was the price ceiling effective? d. Is the market for donuts efficient?

Answer 1

Solution .5 5 এ 36ा auantity ঠ৭ (a) Imposidron o paice Ceuling dondi wil, Soid $5 Widh the at day boy s) per (At the auantity demanded u abtaind danand Curuu.'. pAIce eauals In ter sedien forom the quantiky demandod at the ndersection tine he puce giuon at a4 The quardty Suppiead Cuue supply oulo dhe rugnt of the quantity Supplied egual lino IS paice das Hence we Cuwant prica J £5 a shostage oei us haue the a shortaye o donut At escolonandithexeeds CamScanner and Supply

uce Celng Is epectiue the prce aing is prica talngof Ceuld 'not excead $5 at due interuectian A A betow dhe equibYum pace dhat ronat Hare e auilbriu pce uon the damand Suppy Curue IMplia the price Costune u a prico Cals $6.5 $5 belao equili brium price at epectus d) At a pice tue Marker fo donuti is ineticient Nihout e pie Lating dha equulbriuM EaLuntibu 65 antiy tonsunes Suplus 361 कवं। IS qun by Hhe area a dhe triaaple ABC, Pyoduer Juiplus BCf total Suuplus is aea o A CF the markit u efiuent Inposihen at pruee Couling, the marbet price Is 5, the auartby Sold is Consuner Surplus is quan by he anea Pno ducor Suaplus is quuon by tha auaa EF Tota Surplu is u quen by the area at dhe-irianple Area ot AC auea or CF Wi dh 43,a4 A4 ED Min AGEB DE total Surp uu Lalu hane dead weght less guen by due anea of dhe .8 Market AGEF tlere Lee Hhat due Luue uue lruangu GEC donul ने ronton es Scanned with CamScanner