--%>
Assignment Help - homework help

Original equilibrium and effect of price ceiling on gas

Assume that the equilibrium price of a gallon of gas is $1.40 per gallon. The government decides to place a price ceiling on gasoline & will not let sellers to charge more than $1.50 per gallon. Draw this using a graph. Ensure that you illustrate the original equilibrium and the effect of the price ceiling on the market. What will occur in this market?

There will be no influence of this price ceiling on the market. If sellers attempt to charge a price of $1.50 per gallon, quantity demanded (QD) would be lower than quantity supplied (QS). It means that there would be a surplus. As the price ceiling is a maximum price, it does not stop the price from falling as it would in this case. Thus, the price of gasoline will remain $1.40 per gallon.

 

348_vs45.png

   Related Questions in Biology

  • Q : Flying and aquatic mammal Are there

    Are there flying and aquatic mammals?

    		•
  • Q : Define Cataract Cataract : A Cataract

    Cataract: A Cataract is a clouding of Crystalline Lens within the eye. This is not a film over the eye. The Crystalline Lens is made up of soft flexible protein which is surrounded by an elastic membrane termed as Capsule. Whenever the soft, normally

    		•
  • Q : What is hematosis What do you mean by

    What do you mean by the hematosis? Where does hematosis occur within human?

    		•
  • Q : Social system approach Social system

    Social system approach Closely resembling the human behavior approach and often confused or intermixed with it is the Social system approach. Although earlier pionee

    		•
  • Q : Arthropod groups-according to the

    According to the number of limbs, how are the three main arthropod groups characterized? Answer: Most of the crustaceans contain five pairs of limbs. Insects contain

    		•
  • Q : Plant hormone remarkable for fruit

    What is the plant hormone remarkable for fruit ripening and stimulating flowering? What are the uses and practical inconveniences of which hormone?

    		•
  • Q : What is Imaging Technology Imaging

    Imaging Technology: Imaging is the storage, capture, manipulation, and display of images. In document imaging, the emphasis is on storing, capturing, and retrieving information from images (that are mainly images of text). In graphical imaging, the im

    		•
  • Q : Health & Safety in the Workplace What

    What are the basic characteristics of Health & Safety (H & S) in the Workplace organization?

    		•
  • Q : What are datasets Datasets : Datasets

    Datasets: Datasets are sequential files (that is, processed on application server) are termed as datasets. They are employed for file handling in SAP.

    		•
  • Q : Cell Biology Cell Biology: This is the

    Cell Biology: This is the branch of biology that deals with the study of morphological, organizational, physiological, biochemical, genetical, developmental pathological and evolutionary aspects of cell and its components. Cell biology is a scientific

    		•