8 . Problems and Applications Q10

A market is described by the following supply and demand curves: Qs = 4P 9):) = 400 P The equilibrium price is $ and the equilibrium quantity is . Suppose the government imposes a price ceiling of $90. This price ceiling is V , and the market price will be $ . The quantity supplied will be , and the quantity demanded will be . Therefore, a price ceiling of $90 will result in v . Suppose the government imposes a price oor of $90. This price floor is V , and the market price will be . The quantity supplied will be and the quantity demanded will be . Therefore, a price oor of $90 will result in v . Instead of a price control, the government levies a tax on producers of $10. As a result, the new supply curve is: Q5 = 4(P 10) With this tax, the market price will be , the quantity supplied will be C] , and the quantity demanded will be C] . The passage of such tax will result in V