Suppose there is a competitive market for a certain good, and the market demand and supply functions
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Question:
Suppose there is a competitive market for a certain good, and the market demand and supply functions are given by:
Demand: P = 120 - 4Q
Supply: P = 3Q
Where P is the price of the good and Q is the quantity of the good.
1. Find the equilibrium price and quantity in this market.
2. Now suppose the government imposes a price floor of $80 on this market. What will be the new equilibrium price and quantity? How will this price floor affect the quantity supplied and the quantity demanded in the market?
Related Book For
Managerial Economics A Problem Solving Approach
ISBN: 978-1133951483
3rd edition
Authors: Luke M. Froeb, Brian T. McCann, Mikhael Shor, Michael R. War
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