Question
Suppose the government decides to impose a price floor on dairy products to prevent dairy farms from closing down. If the market for a case
Suppose the government decides to impose a price floor on dairy products to prevent dairy farms from closing down. If the market for a case of milk takes the form of:
Demand: P = 100 – 10Q
Supply: P = 10Q
a). Find the original equilibrium.
b). Find the market equilibrium with a price floor of $60 per case.
c). Illustrate this price floor on a graph.
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Ans Demand P 100 10Q Supply P 10Q a In case of equillibrium demand supply 100 10Q 10Q 20Q ...Get Instant Access to Expert-Tailored Solutions
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
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