Problem
1. What do economists mean when they say that "price floors and ceilings stifle the rationing function of prices and distort resource allocation"?
2. ADVANCED ANALYSIS Assume that demand for a commodity is represented by the equation P =10 - .2Qd and supply by the equation P =2 +.2Qs , where Qd and Qs are quantity demanded and quantity supplied, respectively, and P is price. Using the equilibrium condition Qs= Qd, solve the equations to determine equilibrium price. Now determine equilibrium quantity. Graph the two equations to substantiate your answers.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.