1st attempt In 2006, Venezuela\'s president Hugo Chavez implemented a series of

Question

1st attempt In 2006, Venezuela's president Hugo Chavez implemented a series of price ceilings on commodities. As a result, many citizens hoarded food, and shortages became common throughout the country The graph below represents a market for coffee with a price ceiling set at $1 per can. Price $10 53 52 $1 300 450600 700 750 Quantity ican per week Because of the price celiling, this market is experiencing a(n) of cans of coffee. price celling equillbrium shortage surplus K 05/30 > 4 OF 30 QUESTIONS COMPLETED

Explanation / Answer

Answer - According to the diagram, there is shortage in the market. Demand for coffee is greater than supply of coffee. Government imposed price ceiling at price $1. At this price demand for coffee is 300 can per week and supply is 750 can per week.

Shortage = 750 - 300

Shortage = 450 can per week.

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