MKTG 4P28 Chapter Notes - Chapter 4: Price Ceiling, Price Floor, Economic Equilibrium
8 Jan 2013
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Problem set #3: market equilibrium and government intervention: a demand and supply situation for milk is given in the accompanying diagram. What is the cost to the government of this action: the accompanying diagram shows the demand and supply curves and initial equilibrium for gasoline. 1000p = 2000 + 2q (p = $/bushel, q = What is the price if the output due to the price ceiling was sold in the. Problem set #3: market equilibrium and government intervention. sh. 70 * 60 million = mil: qd = 50 million litres, consumers buy only 50million litres => surplus = qs - qd = 40 mil. litres, the government must buy the surplus at the price floor. > million revenue b) i) 30 million litres: shortage = qd - qs. = 90m - 30m = 60m liters iii)sh. 70 (from do at 30 million litres)
