Price ($) 100 90 80 70 60 50 (44.5,40) 40 30 20 10 0- (44.5,63) (72.5,58.58) 72.5,401 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Quantity leans Suppose that the government sets a price ceiling of $40 on the price of jeans. Assuming that the market was initially at a competitive equilibrium, what is the approximate change in consumer surplus? To review this concept, see the section Analysis of Price Ceilings. $825.75 $1500 $1024.25 $344.25

Price ($) 100 90 80 70 60 50 (44.5,40) 40 30 20 10 0- (44.5,63) (72.5,58.58) 72.5,401 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Quantity leans Suppose that the government sets a price ceiling of $40 on the price of jeans. Assuming that the market was initially at a competitive equilibrium, what is the approximate change in consumer surplus? To review this concept, see the section Analysis of Price Ceilings. $825.75 $1500 $1024.25 $344.25

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter3: Demand And Supply

Section: Chapter Questions

Problem 7SCQ: What is the effect of a price ceiling on the quantity demanded of the product? What is the effect of...

See similar textbooks

Similar questions

What is consumer surplus? How is it illustrated on a demand and supply diagram?
What is total surplus? How is it illustrated on a demand and supply diagram?
What is the relationship between total surplus and economic efficiency?
Suppose you learned that the price elasticity of demand for wheat is 0.7 between the current price for wheat and a price 2 higher per bushel. Do you think that farmers collectively would try to reduce the supply of wheat and drive the price up 2 higher per bushel? Explain your answer. Assuming that they would try to reduce supply, what problems might they have in actually doing so?
What is the relationship between quantity Demanded and quantity supplied at equilibrium? What is the relationship when there is a shortage? What is the relationship when them is a surplus?
How can you locate the equilibrium point on a demand and supply graph?
Does a price ceiling change the equilibrium price?
Table 3.8 shows information on the demand and supply for bicycles, where the quantities of bicycles are measured in thousands. What is the quantity demanded and the quantity supplied at a price of 210? At what price is the quantity supplied equal to 48,000? Graph the demand and supply curve for bicycles. How can you determine the equilibrium price and quantity from the graph? How can you determine the equilibrium price and quantity from line table? What HIE die equilibrium price and equilibrium quantity? If the price was 120, what would the quantities demanded and supplied he? Would a shortage or surplus exist? If so, how large would the shortage or surplus he?
Explain why the following statement is false: In the goods market, no buyer would be willing to pay more than me equilibrium price.
What is the effect of a price ceiling on the quantity demanded of the product? What is the effect of a price ceiling on the quantity supplied? Why exactly does a price ceiling cause a shortage?
Under which circumstances does line tax burden fall entirely on consumers?
In a market where the supply curve is perfectly inelastic how does an excise tax affect the price paid by consumers and the quantity bought and sold?