Market Equilibrium for Demand and Supply

Question 1

price ceiling

Answer 1

maximum price for a good set by government

Question 2

How does a price ceiling affect market equilibrium?

Answer 2

maximum price set above equilibrium price has no effect maximum price set below equilibrium creates shortage

Question 3

price floor

Answer 3

minimum price for a good set by government

Question 4

How does a price floor affect market equilibrium?

Answer 4

minimum price set above equilibrium price creates surplus minimum price set below equilibrium price has no effect

Question 5

What are maximum prices generally placed on?

Answer 5

goods considered to be necessities

Question 6

maximum price deadweight welfare loss

Answer 6

C + E

Question 7

maximum price black market price

Answer 7

P1

Question 8

maximum price illegal black market profit

Answer 8

B + D

Question 9

maximum price post-black market consumer surplus

Answer 9

A

Question 14

what are minimum prices a trade off between?

Answer 14

market efficiency and desireable socio-political policies

Question 15

what is the supply curve for a fixed quantity of a good?

Answer 15

vertical (perfect inelasticity of supply) momentary supply curve