In an economy you estimate the supply curve of milk to be Ps = 3+ Q and the demand curve to be PD = 5-2Q, where Q is the millions of litres and P is price in dollars. WNhat would be the market clearing price and what is the effect of a price ceiling of $3Aitre? O A The market clearing price would be $2 and a price ceiling would have no impact. O B. The market clearing price would be $3.67 and a price ceiling would have no impact. O C. The market clearing price would be $3.67 and a price ceiling would induce a shortage of-1 million litres. O D. The market clearing price would be $4.33 and a price ceiling would induce a shortage of-5 million litres.
In an economy you estimate the supply curve of milk to be Ps = 3+ Q and the demand curve to be PD = 5-2Q, where Q is the millions of litres and P is price in dollars. WNhat would be the market clearing price and what is the effect of a price ceiling of $3Aitre? O A The market clearing price would be $2 and a price ceiling would have no impact. O B. The market clearing price would be $3.67 and a price ceiling would have no impact. O C. The market clearing price would be $3.67 and a price ceiling would induce a shortage of-1 million litres. O D. The market clearing price would be $4.33 and a price ceiling would induce a shortage of-5 million litres.
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter4: The Market Forces Of Supply And Demand
Section: Chapter Questions
Problem 8PA
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Transcribed Image Text:In an economy you estimate the supply curve of milk to be Ps = 3+Q and the demand
curve to be PD = 5-2Q, where Q is the millions of litres and P is price in dollars. WNhat
Would be the market clearing price and what is the effect of a price ceiling of $3/Aitre?
O A The market clearing price would be $2 and a price ceiling would have no impact.
O B. The market clearing price would be $3.67 and a price ceiling would have no impact.
O C. The market clearing price would be $3.67 and a price ceiling would induce a shortage of-1 million
litres.
O D. The market clearing price would be $4.33 and a price ceiling would induce a shortage of-5 million
litres.
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