If the price ceiling is effective (on N95 masks), will it be above or below the market equilibrium price of $200?a) Aboveb) belowI think the answer A (above) because when I think of price ceiling I think on top. But I'm not sure that is right. MaterialsN95 MarketDerrickSoYes, the U.S. government hasannounced a price regulation forN95 masks. They are going toestablish a price ceiling for N95masks.$200$10D1HannahDo(NOTE- This has not happened in real life, and is atheoretical regulation for the purposes of thisactivity.)QoQ2Q1QuantityQuantityQuantityQuantityPriceDemanded: D_0Supplied: S_0Demanded: D_1$105005005,500$2004,2504,250DerrickIf the price ceiling is effective, will it beabove or below the market equilibriumprice of $200?abovebelowPrice

A price ceiling is effective when it is below the market price. This is because if the price ceiling…

Answered: f the price ceiling is effective (on…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 4E

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Question

If the price ceiling is effective (on N95 masks), will it be above or below the market equilibrium price of $200?

a) Above

b) below

I think the answer A (above) because when I think of price ceiling I think on top. But I'm not sure that is right.

Materials
N95 Market
Derrick
So
Yes, the U.S. government has
announced a price regulation for
N95 masks. They are going to
establish a price ceiling for N95
masks.
$200
$10
D1
Hannah
Do
(NOTE- This has not happened in real life, and is a
theoretical regulation for the purposes of this
activity.)
Qo
Q2
Q1
Quantity
Quantity
Quantity
Quantity
Price
Demanded: D_0
Supplied: S_0
Demanded: D_1
$10
500
500
5,500
$200
4,250
4,250
Derrick
If the price ceiling is effective, will it be
above or below the market equilibrium
price of $200?
above
below
Price

Definition Video Formula Definition Phenomenon in which market supply and demand balance each other. Market equilibrium is the economic state in which the market demand curve intersects the market supply curve, giving us the equilibrium price and equilibrium quantity for which a commodity can be sold and purchased in an economy. When market equilibrium is achieved, it suggests that all resources have been allocated efficiently and that there is just a distribution of income and resources in the economy. Video Formula

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