Price of a cup of coffee $3.50 3.00 2.50 2:00 1.50 1.00 $.50 6 Original Supply...

 

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Price of a cup of coffee $3.50 3.00 2.50 2:00 1.50 1.00 $.50 6 Original Supply New Supply New Demand Original Demand 10 20 30 40 50 60 70 Cups sold in an hour Refer to the figure above. Suppose coffee producers convinced the government to impose a price control requiring that coffee prices must be at least $2.50 at a time when the original (bold) demand function and supply function were applicable. The most likely result would be new equilibrium at a price of $2.50 and a quantity of 50 cups. excess supply of coffee that would not correct itself because price is set by law. O a short term excess demand for coffee, followed by an increase in price. O excess demand for coffee that would not correct itself because price is set by law. Price of a cup of coffee $3.50 3.00 2.50 2:00 1.50 1.00 $.50 6 Original Supply New Supply New Demand Original Demand 10 20 30 40 50 60 70 Cups sold in an hour Refer to the figure above. Suppose coffee producers convinced the government to impose a price control requiring that coffee prices must be at least $2.50 at a time when the original (bold) demand function and supply function were applicable. The most likely result would be new equilibrium at a price of $2.50 and a quantity of 50 cups. excess supply of coffee that would not correct itself because price is set by law. O a short term excess demand for coffee, followed by an increase in price. O excess demand for coffee that would not correct itself because price is set by law.

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