Question
This question is based on a true story and explores a policy instituted by the government of the province of Quebec in Canada to guarantee
This question is based on a true story and explores a policy instituted by the government of the province of Quebec in Canada to guarantee affordable daycare to parents. Assume that the daily market demand and supply for daycare in the province of Quebec are given by:
- Demand:P = 90 - 0.0002QD
- Supply:P= 15 + 0.0001QS
wherePis the (Canadian dollar) price charged per day for a single child who is put in a daycare facility, andQis the total number of children put in daycare each day.
A government official proposes that parents should not have to pay more than $5 per day per child for daycare. In other words, the proposal is to impose aprice ceiling of P= $5on the market for daycare. The demand and supply curves are the same as above. What will be the quantity of daycare supplied with this $5 price ceiling?
Q = 0
Q =100,000
Q = 250,000
Q = 400,000
Impossible to tell
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started