Explain what will result in terms of excess demand or supply

Reference no: EM13213605

1. The widget industry is perfectly competitive. The industry demand and supply functions for widgets are given below. Qd = 424 - 40P Qs = 40 + 8P

a. What is the equilibrium price and quantity for the industry?

b. If the government establishes a price floor of $9, explain what will result in terms of excess demand or supply.

c. If the government establishes a price ceiling of $6, explain what will result in terms of excess demand or supply.

d. Assume the supply curve shifts to Qs' = 34 + 12P What is the new equilibrium price and quantity?

Reference no: EM13213605

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