Question
Refer to problem 7. Suppose a coalition of students from Lincoln High School succeeds in persuading the local government to impose a price ceiling of
Refer to problem 7. Suppose a coalition of students from Lincoln High School succeeds in persuading the local government to impose a price ceiling of $7.50 on used DVDs, on the grounds that local suppliers are taking advantage of teenagers by charging exorbitant prices.
a. Calculate the weekly shortage of used DVDs that will result from this policy.
b. Calculate the total economic surplus lost every week as a result of the price ceiling.
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Principles of Economics
Authors: Robert Frank, Ben Bernanke
5th edition
73511404, 978-0073511405
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