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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.
You have been engaged internal auditor by the management of Alden proprietary limited to review its internal control over the purchases, receipt, storage and issue of raw material.
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