Answered: . At market equilibrium, the price is $…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter8: Understanding Markets And Industry Changes

Section: Chapter Questions

Problem 2MC

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Question

The Organization for the Promotion of Brussels Sprouts has convinced the government of Ironia to institute a price floor on the sale of Brussels sprouts at $8 per bushel. Demand is given by:

P = 9 – Q

and supply by:

P = 2Q,

where Q is measured in thousands of bushels.

Instructions: Round your answers to the nearest whole number.

a. At market equilibrium, the price is $  per bushel and the equilibrium quantity is  thousand bushels.

b. With the price floor, the price is $  per bushel and the quantity sold is  thousand bushels.

c. The excess quantity supplied of Brussels sprouts produced with the price floor is  thousand bushels.

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