A government-set price ceiling will lower equilibrium price and quantity in a market.?
False. The equilibrium price and quantity are set by the market. A price ceiling will not effect what that market equilibrium are. If the price ceiling is set below the market (equilibrium) price, then it will have the effect of guaranteeing that the actual price will be lower than the market price, causing a shortage. But it will not change what that market price would be.
Non-binding price ceiling?
If the price ceiling is imposed above the equilibrium, will there be an excess in supply? For example, the equilibrium price of orange juice is $13. Due to the fact that the price is rising rapidly, the government decides to impose a price ceiling of $15. From the demand-supply graph, there should be an excess in supply as quantity supplied is more the quantity demanded. Is that true? Will the price ceiling prevent the market from reaching back to its equilibrium? In the long run, the supply curve shaped towards a vertical line (more price sensitve) while the long run demand curve remains the same. The imposed price ceiling, will it have a bigger effect in the long run or short run?
Lovers of classical music convince Congress to impose a price ceiling of $50 per concert ticket. As a resul?
I do guess that Congress is not stupid. Price ceiling means that the price of $50 is under the equilibrium price. Theoretically, it will be more demand than supply, or shortage. Not everyone will have a seat, but a ticket. More people will attend.
What effects might a ceiling on the price of fast-food hamburgers have?
In general, a government imposed price ceiling would result in a shortage of the product. This is true for necessity goods such as gasoline. Now for fast food burgers: Let us assume that the price ceiling is imposed due to the hamburgers increasing price. Consumers could simple respond by shifting to a different fast food item or even eating at home and making his own hamburger.
During the winter of 1973-74, a general system of wage and price controls (including a price ceiling on gasoli?
During the winter of 1973-74, a general system of wage and price controls (including a price ceiling on gasoline) was in force in the United States. At the beginning of 1974, some oil-producing countries imposed an oil embargo on the West. In the spring of 1974, price controls were abolished. 16. Refer to Situation 3-1. Before the oil embargo, the price ceiling on gasoline had no noticeable effect on the market. What is the most likely explanation for this? A. The equilibrium price of gasoline was close to the ceiling price and probably below it. B. Twenty years ago, the demand curve for gasoline was quite different from today's. C. Twenty years ago, the supply curve for gasoline was quite different from today's. D. The effects of price ceilings are dependent upon the benevolence of the government imposing them. 17. Refer to Situation 3-1. An economist would predict that the oil embargo imposed in 1974 would result in a A. leftward shift in the supply (curve) of gasoline. B. rightward shift in the supply (curve) of gasoline. C. leftward shift in the demand (curve) for gasoline. D. rightward shift in the demand (curve) for gasoline. E. both a and d 18. Refer to Situation 3-1. If no price controls had been in place, the effect of the oil embargo on the equilibrium price and quantity of gasoline would have been A. an increase in both price and quantity. B. an increase in price and a decrease in quantity. C. a decrease in price and an increase in quantity. D. a decrease in both price and quantity. 19. Refer to Situation 3-1. Because price controls were in effect at the time the embargo occurred, an economist would predict that A. the amount of dollars one would need to pay at the pump for a full tank of gasoline would increase sharply. B. the amount of dollars one would need to pay at the pump for a full tank of gasoline would decline sharply. C. long waiting lines and black markets would appear. D. a surplus of gasoline would result. 20. Refer to Situation 3-1. An economist would predict that once price controls were abolished in the spring of 1974, A. the price of gasoline would decline sharply. B. the surplus of gasoline would vanish. C. the shortage of gasoline would vanish. D. the demand for gasoline would decrease. E. both c and d