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Assume the following data describe the gasoline market:

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Assume the following data describe the gasoline market;Price per gallon: $2.00 2.25 2.50 2.75 3.00 3.25 3.50;Quantity demand 26 25 24 23 22 21 20;Quantity supplied 16 20 24 28 32 36 40;(a) What is the equilibrium price?;(b) If supply at every price is reduced by five gallons, what will the new equilibrium price be?;(c) If the government freezes the price of gasoline at its initial equilibrium price, how much of a surplus or shortage will exist when supply is reduced as described above?;(d) Illustrate your answers on a graph.

 

Paper#30683 | Written in 18-Jul-2015

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