A market is described by the following supply and demand curves:
Qs = 2P
QD = 300 - P
The equilibrium price is $100 and the equilibrium quantity is 200.
Suppose the government imposes a price ceiling of $90. This price ceiling is not binding, and the market price will be $. The quantity supplied will be 180, and the quantity demanded will be 210. Therefore, a price ceiling of $90 will result in a shortage.
Suppose the government imposes a price floor of $90. This price floor is not binding, and the market price will be $100. The quantity supplied will be 200 and the quantity demanded will be. Therefore, a price floor of $90 will result in neither a shortage nor a surplus.
Instead of a price control, the government levies a tax on producers of $30. As a result, the new supply curve is:
Qs = 2(P - 30)
With this tax, the market price will be $, the quantity supplied will be, and the quantity demanded will be. The passage of such tax will result in
