Suppose demand and supply are given by Qd = 60 - P and Qs = 1.0P - 20.

Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $30 is imposed in the market. Also, determine the full economic price paid by consumers.

-Quantity demanded, quality supplied 20

-Magnitude of the shortage if a price ceilimg of 30, is 20

-Full economic price equilibrium 40

Explanation:

We have to equate both of them to find,

1.0P-20=60-P

2P=80

P=40

Now put the value of p, p=40

Qd=60-40

Qd=20

Now put the value of p, p=40

Qs=1.0P-20

Qs=1*40-20

Qs=20

Given in question 30 is applied

Qd=60-30

Qd=30

30 applied,

Qs=1.0P-20

Qs=1*30-20

Qs=10

Shortage is hence, 20.

The quantity demanded and supplied at equilibrium is is 20

When there is a price imposition of $30, the shortage is 20

Full economic price is $40 (equilibrium price)

Explanation:

At equilibrium Qd=Qs

60-P=1.0P-20

60+20=2P

2P=80

P=$40

Qd=60-40

Qd=20

Qs=1.0P-20

Qs=1*40-20

Qs=20

When a price of $30 is imposed:

Qd=60-30

Qd=30

Qs=1.0P-20

Qs=1*30-20

Qs=10

Shortage is = 30-10

=20