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August 30, 2015

Homework Help: Microeconomics

Posted by Lacy on Saturday, March 27, 2010 at 10:15pm.

Consider Good E, which, when sold in a particular country, has an equilibrium price = $10.00.
The government of that country decided that it doesn’t like that equilibrium price, and so passes a law which prevents the product from selling for $10.00.
After the passage of the law, quantity demanded for Good E= 100,000, while quantity supplied = 130,000.
Did the government enact a price ceiling or a price floor? Draw a graph to explain your answer.

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