Suppose the demand for classical music concert tickets is downward sloping and the supply of classical music concert tickets is upward sloping. Lovers of classical music persuade Congress to impose a price ceiling of $40 per concert ticket.

For each of the equilibrium prices listed in the following table, indicate whether a price ceiling of $40 will cause more, fewer, or the same number of people to attend classical music concerts than if there is no price control.

Equilibrium Price

Result of Price Ceiling on Concert Attendance

More

Same

Less

$30
$40
$50

Question

20-02-2020
Business

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Suppose the demand for classical music concert tickets is downward sloping and the supply of classical music concert tickets is upward sloping. Lovers of classical music persuade Congress to impose a price ceiling of $40 per concert ticket.

For each of the equilibrium prices listed in the following table, indicate whether a price ceiling of $40 will cause more, fewer, or the same number of people to attend classical music concerts than if there is no price control.

Equilibrium Price

Result of Price Ceiling on Concert Attendance

More

Same

Less

$30
$40
$50

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I need some help I just don't understand these 2 questions.

ewomazinoade ewomazinoade · Answer 1 · 2020-02-20T13:35:56+01:00

Answer:

$30 - same

$40 - same

$50 - less

Explanation:

Price ceiling is when the government or an agency of the government sets the maximum price for a good or service.

Price ceiling is binding when the price is set below the equilibrium price for that good.

An equilibrium price of $30 is less than $40, so the price ceiling isn't binding and there would be no effect on the number of people attending the concert. Same argument applies when equilibrium price is $40.

Equilibrium price of $50 is greater than price ceiling. This would lead to an increase in demand over supply causing a shortage. This would cause a reduction in the number of people that attend concerts.

I hope my answer helps you