Computing shortage of goods after price ceiling

Reference no: EM1312442

American Mining Company is interested in obtaining quick estimates of the supply and demand curves for coal. The firm's research department informs you that the elasticity of supply is approximately 1.7, the elasticity of demand is approximately -0.85, and the current price and quantity are $41 and 1,206, respectively. Price is measured in dollars per ton, quantity the number of tons per week.

If the government refused to let American raise the price when demand increased, what shortage is created?

Reference no: EM1312442

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