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A U.S. state decides to make itself more affordable and to protect its citizens by putting a price ceiling on electricity. The demand for electricity
A U.S. state decides to make itself more affordable and to protect its citizens by putting a price ceiling on electricity. The demand for electricity in this state is P = 70 - Q and the supply of electricity is P = 4 + .1Q, where quantity is measured in kilowatt-hours of electricity used and the price is cents per kilowatt-hour. Calculate the equilibrium price and quantity. What will be the quantity demanded and quantity supplied if the price ceiling is set at 7 cents per kilowatt-hour? 9 cents? 11 cents?
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