In a competitive market, the market demand is Qd= 60 −6Pand the market supply is Qs=...

Question

Question

In a competitive market, the market demand is Q^d= 60 −6Pand the market supply is Q^s= 4P. A price ceiling of $4 will result in

(a) A shortage of 18 units.

business economics

Answer 1

Answer #1

Answer is option B)

At P = 4,

Qd = 60-6*4

= 60-24

= 36

& Qs= 4*4 = 16

Thus as Qd > Qs

Thus shortage exists , hence c & d, e are false.

now shortage, = Qd- Qs

= 36-16

= 20 units Shortage

Add a comment

Answer 2

Similar Homework Help Questions

In a competitive market, the market demand is Qd = 60 - 6P and the market...

In a competitive market, the market demand is Qd = 60 - 6P and the market supply is Qs = 4P. The full economic price under a price ceiling of $3 is? The answer is "8", but how do you get there?
1 Suppose the demand for shoes is given by: QD= 210 -2P. The supply of shoes...

1 Suppose the demand for shoes is given by: QD= 210 -2P. The supply of shoes is given by: QS= 9P -120. Calculate the Gains from Trade (also known as Economic Surplus) that would exist in this market in a competitive equilibrium. 2 Suppose the demand for jackets was given by: QD= 140 -0.4P. The supply of jackets is given by: QS= 4P -80. Suppose the price was $49 per jacket. Calculate whether there is a surplus or shortage of...
Assume that the market can be represented by the supply and demand curves: Qs = 6P...

Assume that the market can be represented by the supply and demand curves: Qs = 6P - 60 Qp = 60 - 4P If the price is 14 (P=14) then the quantity (Q) at market disequilibrium would result in A shortage of 20 units A surplus of 20 URT A surplus cf2units A shortage units n

Use the following demand and supply functions to answer this question; Qd=100-2p; Qs=60+2p ; If a...

Use the following demand and supply functions to answer this question; Qd=100-2p; Qs=60+2p ; If a ceiling price of $8 is established by the government, then a new equilibrium price will emerge. a shortage of 84 will result. a shortage of 8 will result. a surplus of 8 will result.
Suppose that the market demand and supply equations in a perfectly competitive market are QD =...

Suppose that the market demand and supply equations in a perfectly competitive market are QD = 16 − 4P and QS = −2 + 2P, respectively. What is the full economic price if the government imposes a price ceiling of $2?
Suppose demand and supply are given by Qd = 60 – P and Qs = P...

Suppose demand and supply are given by Qd = 60 – P and Qs = P -20 What are the equilibrium quantity and price in this market? Determine the quantity demanded, the quantity suppled, and the magnitude of the surplus id a price floor of $50 is imposed in this market. Determine the quantity demanded, the quantity suppled, and the magnitude of the shortage if a price celling of $32 is imposed in this market. Also determine the full economic...

Suppose demand and supply are given by Qd = 60 – P and Qs = P...

Suppose demand and supply are given by Qd = 60 – P and Qs = P -20 What are the equilibrium quantity and price in this market? Determine the quantity demanded, the quantity suppled, and the magnitude of the surplus id a price floor of $50 is imposed in this market. Determine the quantity demanded, the quantity suppled, and the magnitude of the shortage if a price celling of $32 is imposed in this market. Also determine the full economic...
6. Given the following demand and supply curve, Qd = 500 - 4P and Qs =...

6. Given the following demand and supply curve, Qd = 500 - 4P and Qs = 5P - 400 a. Calculate and graph the market equilibrium, P and Q b. If the government raises the price to $105, calculate and graph the surplus or shortage that it creates
Suppose that supply and demand are given by the following equations: QD = 40 – 4P...

Suppose that supply and demand are given by the following equations: QD = 40 – 4P and QS = 2p – 2. In the above market, if a price floor of $8.50 was put into place, which of the following would result? A) A shortage of 10 units B) A surplus of 11 units C) Deadweight loss of at least $24 D) An increase in consumer surplus. Why is the Answer C?

Assume that the supply and demand equations for beer in Canada are: QD = 60 –...

Assume that the supply and demand equations for beer in Canada are: QD = 60 – 6P QS = 4P – 20 a. Graph the demand and supply equations. b. Calculate the equilibrium price and quantity. c. Label the consumer surplus and producer surplus at the equilibrium. d. Calculate consumer surplus, producer surplus and total surplus at the equilibrium. e. Now suppose a price floor of $9 is implemented. Calculate the shortage/surplus that occurs at this price. f. Label the...