ECON 1B03 Lecture Notes - Economic Equilibrium, Price Ceiling, Price Floor

• School: McMaster University
• Department: Economics
• Course: ECON 1B03
• Professor: Bridget O' Shaughnessy

Document Summary

Unit 3: the elasticity of demand and supply - objective 3: Suppose that the total demand for and supply of eggs per month in edmonton are as shown in table 3. 7. Table 3. 7: supply of and demand for eggs. We can read the equilibrium price and quantity directly from this table. 75,000 dozen eggs will be demanded, and 75,000 dozen eggs will be supplied. We can present this data on a supply/demand graph, as in figure 3. 9, below. Point a marks the equilibrium price and quantity. Figure 3. 9: demand and supply curves for eggs. Suppose the government decides to put a ceiling price of . 30 per dozen on eggs (see. Figure 3. 10: effect of a price ceiling on the equilibrium price and quantity of eggs. In figure 3. 10, point a is the equilibrium price and quantity determined by the marketplace. Point b is where the ceiling price (. 30) intersects the demand curve; it indicates that at.