In exercise 3, indicate what the price would have to be to represent an effective price ceiling. Point out the surplus or shortage that results. Illustrate a price floor and provide an example of a price floor.

Data from in exercise 3

Using the following schedule, define the equilibrium price and quantity. Describe the situation at a price of \($10.\) What will occur? Describe the situation at a price of \($2.\) What will occur?

Transcribed Image Text:

Price Quantity Demanded Quantity Supplied $1 500 100 $2 400 120 $3 350 150 $4 320 200 $5 300 300 $6 275 410 $7 260 500 $8 230 650 $9 200 800 $10 150 975