QuestionFind the shortage when a price ceiling of \$ 600 is set on generators, given the supply and demand data.
Studdy Solution
STEP 1
Assumptions1. The price ceiling is set at $600. The quantity supplied and demanded are given at different price levels3. The shortage is the difference between the quantity demanded and the quantity supplied at the price ceiling
STEP 2
First, we need to find the quantity supplied and the quantity demanded at the price ceiling. From the table, we can see that at a price of $600, the quantity supplied is480 and the quantity demanded is640.
STEP 3
To calculate the shortage, we subtract the quantity supplied from the quantity demanded at the price ceiling.
STEP 4
Now, plug in the given values for the quantity demanded and quantity supplied at the price ceiling to calculate the shortage.
STEP 5
Calculate the shortage.
The shortage caused by the price ceiling is160 generators.
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