Suppose demand is given by Q^d = 500 - 15P and supply is given by Q^s = 5P. 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

At the price floor of $30, quantity demanded is:
500 - 15(30) = 50
While quantity supplied is:
5(30) = 150
This creates an excess supply of 150 - 50 = 100. Therefore, the best choice is C, 100.

Suppose Demand Is Given by Qd = 500 - 15P

Suppose Demand Is Given by Q^d = 500 - 15P