Assume the market for natural gas can be explained by where, Ask an Expert

Economics

Assume the market for natural gas can be explained by:

Demand: Q(D)= 80 - 5P
Supply: Q(S)= 20 - 15P

Where P is the price ($) of natural gas per million BTU, Q(D) is the quantity demanded and Q(S) is the quantity supplied of million BTUs of natural gas per day.

[A] Determine the equilibrium price P* and equilibrium Q*?

[B] Assume the government imposes a price ceiling P(ceiling) of $2 per million BTUs. Find the total shortage associated with the price ceiling.

[C] Compute the full economic price. How much is the non-pecuniary price?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M9309652

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