Question

Market for flat-screen TVs:
Demand: Qd=2,600-5P
Supply: Qs=-1000 +10P
What would be the amount of shortage if a price ceiling is imposed at price of $205?
Your Answer: 1100
Answer

Answer 1

Answer:

  525

Step-by-step explanation:

The demand at a price of 205 is ...

  Qd = 2600 -5(205) = 2600 -1025 = 1575

The supply at a price of 205 is ...

  Qs = -1000 +10(205) = 2050 -1000 = 1050

The demand exceeds the supply by ...

  1575 -1050 = 525

The shortage is 525 units.