Assume that the government creates price controls for tomatoes in order to help the poor. If these price controls take the form of a price ceiling in which the government prohibits the price of tomatoes from rising above $0.85 per kg, will there be a surplus or shortage of tomatoes? Calculate the quantity of the surplus or shortage.

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ANSWER Solution I If the government imposes a price ceiling of 085 per kg for tomatoes it is likely ... View the full answer