Explain specific effects of price controls at given prices

Reference no: EM13206028

Identify and explain specific effects of price controls at given prices.
Using the hypothetical information in the table on the market for gasoline, complete the following questions:

Price of Gasoline (per gallon) Quantity Demanded (millions of gallons per week) Quantity Supplied (millions of gallons per week)
$0.50 85 0
$1.00 75 15
$1.50 65 20
$2.00 55 25
$2.50 45 30
$3.00 35 35
$3.50 25 45
$4.00 15 55

Fill in the blanks highlighted in yellow.

A. Graph the demand and supply for gasoline using the myeconlab grapher software. Please start your graph at the origin and label each axis and each curve. (Note: Change the numbers on each axis. Label each axis and each curve. Start your graph from the origin.)
Insert the graph into a Word document. To paste the graphed image on a Word document, press and hold "ALT," then press "PrtScrn" while viewing the graphed image. Select a point on the Word document to paste the graph. Press and hold "Ctrl," then press "V."
Next, answer the following questions.

B. The equilibrium price of gasoline is _____ and the equilibrium quantity is ___.

C. The government imposes a price ceiling of $2.50 in this market. The prevailing price in this market is now _______. The quantity demanded is now _________ and the quantity supplied is __________.

D. The price ceiling results in a (SURPLUS OR SHORTAGE) _______________ in the amount of _______.

Reference no: EM13206028

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