(a) Consider the exercise in Question 1(b). The government now declares that steak burger meals in...

(a) Consider the exercise in Question 1(b). The government now declares that steak burger meals in that locality should sell for $5.00. Given the correct answers in Question 1(b), would this represent a price ceiling or a price floor? Explain. Further, determine what would be the quantity of shortage or surplus that would exist in this market, and be explicit whether it is a surplus or a shortage and explain why. (4 pts)

(b) Given the readings you looked at on price controls, what other problems typically arise beside shortages or surpluses, when price controls are put in place within well- functioning markets? (2 pts)

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Rahul Sunny answered 1 year ago

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