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Homework answers / question archive / supply curves and plot the information from the table on the graphs
supply curves and plot the information from the table on the graphs. Then answer the questions. Price Price Quantity demanded (bushels of oats) 10,000 15,000 20,000 25,000 30,000 35,000 $4.40 4.20 4.00 Quantity supplied (bushels of oats) 40,000 35,000 30,000 25,000 20,000 15,000 3.80 3.60 3.20 Find the equilibrium price and quantity for oats. If the government decided to set price ceiling of oats at $3.2 per bushel, tell whether there would be a surplus or shortage and how much it would be? you think government impose price ceiling on necessities such as pats? Evaluate the implication of this policy on the market. Why do
A) Equilibrium occurs when quantity demanded = quantity supplied at a price which occurs when equilibrium price is $3.8 and equilibrium quantity traded is 25,000 units in the table above.
B) Price ceiling of $3.2
At this price, there is demand of 35,000 while supply of 15,000 which result in shortage of 35,000 - 15,000 = 20,000.
People would be reluctant to pay higher price due to shortage which will result in creation of black market of oats.
C) Price ceiling is generally imposed by government to keep price of a good in control such that it is affordable for general public. As oats is a major source of breakfast, government is trying to keep its price at low.
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