Suppose demand and supply are given by Qd = 60 - P and Qs = P -

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Suppose demand and supply are given by Qd = 60 - P and Qs = P - 20.

a. What are the equilibrium quantity and price in this market?

b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $ 50 is imposed in this market.

c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $ 32 is imposed in this market. Also, determine the full economic price paid by consumers.

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Managerial Economics and Business Strategy

ISBN: 978-0073523224

8th edition

Authors: Michael Baye, Jeff Prince

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Question Posted: Apr 18, 2014 08:58 AM

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Suppose demand and supply are given by Qd = 60 - P and Qs = P -

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a Equating quantity supplied and quantity demanded yields the equation Solving for P yields the equi...View the full answer

Managerial Economics and Business Strategy

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