Effect of price flooring and price ceiling on demand

Reference no: EM1312702

Using the following schedule, define the equilibrium price and quantity. Describe the situation at a price of $10. What will occur? Describe the situation at a price of $2. What will occur?

Price	Quantity demanded	Quantity supplied
$1	500	100
$2	400	120
$3	350	150
$4	320	200
$5	300	300
$6	275	410
$7	260	500
$8	230	650
$9	200	800
$10	150	975

1. Suppose the government imposed a minimum price of $7 in the schedule of question 1. What would occur? Illustrate.

2. In question 1, indicate what the price would have to be to represent an effective price ceiling. Point out the surplus or shortage that results. Illustrate a price floor and provide an example of a price floor.

3. Evaluate the following statement: "The demand for U.S. oranges has increased because the quality of U.S. oranges demanded in Japan has risen."

Reference no: EM1312702

Questions Cloud

Illustration of impacts of given events : Illustrate each of the following events using a demand and supply diagram for bananas.

Computation of present value of cash flows : Computation of present value of cash flows and What is the present value of this cash stream

Estimating the standard z-scores : Suppose the random variable x is best described by a normal distribution with µ = 24 and σ = 2.7. Find the z-score that corresponds to each of the following x values.

Evaluate the total interest expense for 2010 : Evaluate the total interest expense for 2010 and Will the bond proceeds always be less that the face amount of the bonds when the contract rate is less that market rate of interest?

Effect of price flooring and price ceiling on demand : Using the following schedule, define the equilibrium price and quantity. Explain the situation at price of $10. What will occur? Discuss the situation at a price of $2. What will occur?

Distribution-approximately normal : The mean maximum oxygen uptake for elite athletes has been found to be 80 with a standard deviation of 8.1. Assume that the distribution is approximately normal.

Computation of arbitrage opportunity : Computation of arbitrage opportunity and how much would you make on the arbitrage

Find net income and retained earnings : Calculate net income and Retained earnings based on the information below. Be sure to show all work and label each answer clearly.

Calculation of salary payable net taxes : Calculation of Salary payable net Taxes - Calculate Gross Pay and Net pay for employee #12's weekly pay.

User Account

All Pages