by selling food and drink. As a result, demand for movie tickets falls by six units at every price.

b. The city eliminates a tax that it placed on all local entertainment businesses. The result is that the

quantity supplied of movies at any given price increases by 10%.

Price per Ticket Qd Qs

$5.00

$6.00

$7.00

$8.00

$9.00

TABLE 3.10

26 16

24 18

22 20

21 21

20 22

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57. A low-income country decides to set a price ceiling on bread so it can make sure that bread is affordable to

the poor. Table 3.11 provides the conditions of demand and supply. What are the equilibrium price and

equilibrium quantity before the price ceiling? What will the excess demand or the shortage (that is,

quantity demanded minus quantity supplied) be if the price ceiling is set at $2.40? At $2.00? At $3.60?

3 • Problems 85

Price

Qd

Qs

$1.60 9,000 5,000

$2.00 8,500 5,500

$2.40 8,000 6,400

$2.80 7,500 7,500

$3.20 7,000 9,000

$3.60 6,500 11,000
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