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Suppose demand and supply are given by Qd = 60 - P and Qs = 1.0P - 20.
a. What are the equilibrium quantity and price in this market?
Equilibrium quantity:
Equilibrium price: $
b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $52 is imposed in this market.
Quantity demanded:
Quantity supplied:
Surplus:
c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $35 is imposed in the market. Also, determine the full economic price paid by consumers.
Shortage:
Full economic price: $
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