Introduction:
Price ceiling is the law that sets a maximum price below the equilibrium market price, but a price floor is the law that sets a maximum price above the market equilibrium price.
Tasks:
Using the data provided in the accompanying table, fill in the last column and then provide answers to the following:
| Price | Quantity Demanded | Quantity Supplied | Surplus (+) or Shortage (–) |
| $12 | 7 | 9 | |
| $11 | 8 | 8 | |
| $10 | 9 | 7 | |
| $9 | 10 | 6 | |
| $8 | 11 | 5 | |
| $7 | 12 | 4 |
- Identify whether the number is a surplus, shortage, or neither.
- What is the efficient quantity?
- What price results in the efficient quantity? Using the data from the table, draw graphs of a demand and supply curve and indicate the point of equilibrium with the help of the Grapher Press the Alt+PrintScrn keys simultaneously. Open a Microsoft Word document and insert the image by pressing the Ctrl+V.
- Suppose a price ceiling of $8 is established. Does a surplus or shortage result? What is the amount of surplus or shortage?
- Suppose a price ceiling of $12 is established. What is its effect?
- Suppose a price floor of $12 is established. Explain its effect.
Deliverables and Format:
Submit answers in a minimum of 100 words in a Microsoft Word document.
Font: Arial; 12
Line Spacing: Double
Effect of Electricity Deregulation
Introduction:
Increased competition after deregulation was expected to increase the supply of electricity and lower prices, but high energy costs offset the effects of deregulation.
- Californians wound up paying a high “price” because the state held down the price of electricity. Why did that happen?
- Could this have been avoided? How?
- What was the “well-intentioned” result of government regulation and intervention?
