Suppose demand is given by $Q ^ { d } = 500 - 15 P \text { and supply is given by } Q ^ { s } = 5 P$ . If the government imposes a $30 price floor, the excess supply will be
A)25
B)50
C)100
D)150

Question

Quizplus · Accepted Answer

The equilibrium price is $P = 25$ and the equilibrium quantity is $Q = 250$. With a price floor of $P = 30$, the quantity supplied is $Q ^ { s } = 150$ and the quantity demanded is $Q ^ { d } = 200$. Therefore, the excess supply is $150 - 200 = -50$.

Suppose Demand Is Given By Qd=500−15P and supply is given by Qs=5PQ ^ { d } = 500 - 15 P \text { and supply is given by } Q ^ { s } = 5 PQd=500−15P and supply is given by Qs=5P

Suppose Demand Is Given By $Q ^ { d } = 500 - 15 P \text { and supply is given by } Q ^ { s } = 5 P$