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Question

This window shows your responses and what was marked correct and i incorrect from your previous attempt. Supplied warded 110 120 Suppose that city leaders want to prevent the price of AA batteries from rising when tornadoes threaten Tulsa, Oklahoma. They impose a price ceiling of $12 for packages of AA batteries. b. Assume the city does not impose the price ceiling when tornadoes threaten Tulsa, Oklahoma. What are the equilibrium price and quantity of AA batteries without the price ceiling in effect? P-$ 12 -90 packs c. Now assume that a price ceiling has been imposed on the market for AA batteries during the weeks when tornadoes threaten Tulsa What are the quantity demanded and quantity supplied with the price ceiling in effect? O80 O packs

Explanation / Answer

From the table, we see that the market price at the equilibrium is $14 and the market quantity is 80 units.

Price ceiling at $12 is imposed in the market. It is binding because the market price above this price.

b) Without ceiling the market price at the equilibrium is $14 and the market quantity is 80 units.

c) With a price ceiling of $12, the quantity demanded in the table is Qd = 90 packs and the quantity supplied is Qs = 60 packs.

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