NOMICS Section $054$ Spring Semester $2024$ M

Question $6$ of $60$

During World War II$,$ many goods such as butter, sugar, and gasoline were rationed or price controls were imposed.

The graph on the right shows the market for gasoline.

Suppose that the government decides to set a price ceiling of $$2\mathrm{.}00$ on gasoline. This price is shown on the graph.

$1.)$ Using the line drawing tool, show the implicit supply curve, given the price ceiling. Label it 'implicit supply'.

$2.)$ Using the point drawing tool, identify the implicit price and quantity. Label it 'implicit price'. Carefully follow the instructions above, and only draw the required objects.

The black market price of gasoline, including cost of time, is likely to be higher than the original equilibrium price.