Please answer the question d. Assume the following data describe the gasoline market: (a) Graph the demand and supply curves. (b) What is the equilibrium price? (c) If supply at every price is reduced by 6 gallons, what will the new equilibrium price be? (d) If the government freezes the price of gasoline at its initial equilibrium price, how much of a surplus or shortage will exist when supply is reduced as described in part (c)?

Part A and B: The equilibrium price = $3 and quantity = 32 units

Answered: Please answer the question d . Assume…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please answer the question d

. Assume the following data describe the gasoline market:

(a) Graph the demand and supply curves.

(b) What is the equilibrium price?

(d) If the government freezes the price of gasoline at its initial equilibrium price, how much of a surplus or shortage will exist when supply is reduced as described in part (c)?

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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