Question

Suppose that we have the following demand and supply functions.
QX = 100 – 0.4PX
QX = 40 + 0.2PX
a. What is the equilibrium market price for product X?
b. What is the equilibrium quantity demanded and supplied
c. Government imposes a price floor of $120. Analyze the impact of this floor on price, quantity demand and supplied. Would this price floor create a surplus or scarcity of this product in the market?



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  • CreatedJuly 29, 2013
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