In his speech, George plans to convince his audience to buy a refillable water bottle instead of disposable water bottles. What
1 answer:
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Answer:
A. Set above equilibrium price
Explanation:
A price ceiling is a mandatory maximum price that a seller is allowed to charge. Generally, a government may impose this in order to protect consumers, especially with regards to the purchase of essential goods.
If the price ceiling was set below the equilibrium price (option c) or if the equilibrium price is above the price ceiling (option b), it will immediately cause a shortage (option d) since the quantity demanded would be higher than the quantity supplied when the price falls. This is because people will be willing to purchase more since it is cheaper but suppliers will be willing to produce less due to lower profits. Hence, options b, c and d are eliminated.
Option A is correct because... (please refer attached diagram):
When the price ceiling is above the equilibrium price, suppliers are willing to supply more since they can make higher profits but consumers will reduce purchasing since it is expensive. However, it does not cause any immediate effect because it takes time for suppliers to be able to produce more and cannot be done immediately unless anticipated in advance. In the long run however, quantity demanded will fall from equilibrium quantity to D1 and quantity supplied will rise from equilibrium quantity to S1. Hence, causing a surplus between D1 - S1 in the long run.
Answer:
Answer for the question:
Your buddy Amanda wants your advice. She presents you with the utility schedule above and wants to know how many units of Product B she should purchase to maximize her utility. She tells you the price of Product A is $6 and the price of Product B is $10. Amanda informs you she only wants to spend $48. How many units of Product B do you tell Amanda to purchase?
is given in the attachment.
Explanation:
