P 2 3 4 5 6 7 8 9 10 11 12 13 14
QD 400 380 360 340 320 300 280 260 240 220 200 180 160
QS 40 80 120 160 200 240 280 320 360 400 440 480 520
Suppose the quota is lifted and a price ceiling of 11 is imposed. Find the new market price. How much will be actually be sold?
To find the new market price, we need to consider the supply and demand information provided. Currently, there is a quota in place and the price is determined by the quota system. However, if the quota is lifted and a price ceiling of 11 is imposed, we need to determine the impact on the market.
First, let's examine the supply and demand tables:
Supply:
Price (QS): 40 80 120 160 200 240 280 320 360 400 440 480 520
Quantity Supplied (QS): 2 3 4 5 6 7 8 9 10 11 12 13 14
Demand:
Price (QD): 400 380 360 340 320 300 280 260 240 220 200 180 160
Quantity Demanded (QD): 11 12 13 14 15 16 17 18 19 20 21 22 23
To find the new market price, we need to look for the price at which the quantity demanded equals the quantity supplied. Let's compare the two tables:
At a price of 520, the quantity supplied (QS) is 14, and the quantity demanded (QD) is 23. Since QD > QS, the price is too high.
At a price of 480, the quantity supplied is 13, and the quantity demanded is 22. Again, QD > QS.
Continuing this comparison, we find that at a price of 360, the quantity supplied is 8, and the quantity demanded is 17. At this price, QD = QS. Therefore, the new market price with the price ceiling of 11 is 360.
Now, to determine how much will actually be sold, we can look at the quantity supplied at the new market price. In this case, the new market price is 360, and the corresponding quantity supplied is 8. Hence, 8 units will actually be sold at this price.