Table 6-4 The following table contains the demand schedule and supply schedule f

Question

Table 6-4 The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $3 above the equilibrium price in this market. Price Quantity Quantity DemandedSupplied $1 13 ti $4 $5 $6 1.2 15 18 Refer to Table 6-4. Following the imposition of a price floor $3 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting shortage is O a. 0 units. b. 4 units. O c. 5 units O d. 10 units.

Explanation / Answer

Ans) a. 0 units is the correct option.

Equilibrium price = $3 According to the information price floor is at $6 and price ceiling is at price ceiling is at $5. Because price ceiling is above the equilibrium price so it will be ineffective and there will be no shortage.

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