Multiple Choice
The supply and demand curves for a product are as follows. What is quantity demanded if a price floor of \$21 is set?
QD = 45 - 2P
QS = -15 + P
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5. Consumer and Producer Surplus; Price Ceilings and Floors
Quantitative Analysis of Price Ceilings and Price Floors: Finding Points
Multiple Choice
The supply and demand curves for a product are as follows. What is quantity supplied if a price ceiling of \$4 is set?
QD = 600 - 100P
QS = -150 + 150P
A
150
B
200
C
300
D
450
E
600
Verified step by step guidance1
Identify the supply equation: \( Q_S = -150 + 150P \). This equation shows the relationship between the quantity supplied \( Q_S \) and the price \( P \).
Recognize that a price ceiling is a maximum price set by the government, which in this case is \$4.
Substitute the price ceiling value into the supply equation to find the quantity supplied. Replace \( P \) with 4 in the equation: \( Q_S = -150 + 150(4) \).
Calculate the expression \( 150(4) \) to determine the contribution of the price to the quantity supplied.
Add the result from the previous step to -150 to find the total quantity supplied at the price ceiling of \$4.
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