Chapter 2 – Case Problem Set B

For questions 3-7 use the following table:

Consumer 1 Consumer 2 Consumer 3 Firm 1 Firm 2

Price Quantity Demanded Quantity Demanded Quantity Demanded Quantity Supplied Quantity Supplied

1 20 10 30 0 10
2 15 8 25 5 20
3 10 5 20 10 25
4 5 2 10 20 35
5 0 0 5 30 50

3. What is the equilibrium price in this market?

4. What would happen in this market if a price floor were set at 4?

5. What would happen in this market if a price ceiling were introduced at 2?

6. What would happen in this market if the government were to impose a price
ceiling at 4?

7. What would happen in this market if the government were to impose a price floor
at 2?

Managerial Economics in a Global Economy, 7th Edition