Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Smith and Roberson Business Law

Authors: Richard A. Mann, Barry S. Roberts

15th Edition

1285141903, 1285141903, 9781285141909, 978-0538473637

Students also viewed these Economics questions

Question

Give two reasons why controls would be tested.

Answered: 1 week ago