Figure 6P-1 shows a market in equilibrium. a. Draw a price ceiling at $12. What is the
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a. Draw a price ceiling at $12. What is the amount of shortage at this price? Draw and calculate the deadweight loss.
b. Draw a price ceiling at $4. What is the amount of shortage at this price? Draw and calculate the deadweight loss.
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Price (S) 0 1 2 34 5 6 7 8 9 10 11 12 Quantity
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a The price ceiling is nonbinding because it is above the equilibrium quantity There is ...View the full answer
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