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Question Three (25 points) a)Refer to the figure above. Suppose all the sellers in this market started out charging a price of $50 per unit.

Question Three (25 points)

a)Refer to the figure above. Suppose all the sellers in this market started out charging a price of $50 per unit. What is the most likely result?(8 points)

b)Refer to the figure above. Now suppose that the government imposes a price ceiling of $40. What will happen to equilibrium price?(8 points)

c)"As the price of personal computers continues to fall, demand increases." This sentence is inaccurate. Explain why? (9 points)

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