The demand for pizza is represented by P^D=10-(Q^D/4), and the supply of pizza is represented by P^S=4+(Q^S/2), with Q in thousands and P in dollars. The market for pizza is perfectly competitive. Suppose a price ceiling was set $2 below the equilibrium price. What would be the result? A. There would be a surplus of 12000. B. Quantity demanded would equal 4000. C. This is a nonbinding price ceiling. D. There would be a shortage of 12000.
The demand for pizza is represented by P^D=10-(Q^D/4), and the supply of pizza is represented by P^S=4+(Q^S/2), with Q in thousands and P in dollars. The market for pizza is perfectly competitive. Suppose a price ceiling was set $2 below the equilibrium price. What would be the result? A. There would be a surplus of 12000. B. Quantity demanded would equal 4000. C. This is a nonbinding price ceiling. D. There would be a shortage of 12000.
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter8: Understanding Markets And Industry Changes
Section: Chapter Questions
Problem 2MC
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The demand for pizza is represented by P^D=10-(Q^D/4), and the supply of pizza is represented by P^S=4+(Q^S/2), with Q in thousands and P in dollars. The market for pizza is
Suppose a
A. There would be a surplus of 12000.
B. Quantity demanded would equal 4000.
C. This is a nonbinding price ceiling.
D. There would be a shortage of 12000.
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