7. In the late 18th century, the price of bread in NYC was controlled, and set at a predetermined price which was above the market price. a) Draw a diagram showing supply and demand for bread, and the effects of the policy. Did the policy act as a price ceiling or a price floor? b) What kinds of inefficiencies were likely tơ arise when the controlled price of bread was above the market price? Explain in detail. One year during this period, a poor wheat harvest caused a leftward shift in the supply of bread and therefore an increase in market prices. New York bakers found that the controlled price of bread was now below the market price. c) Draw the diagram showing the effect of the price control on the market for bread during this one year period. Did the policy act as a price floor or price ceiling? d) What kinds of inefficiencies occurred during that period?

7. In the late 18th century, the price of bread in NYC was controlled, and set at a predetermined price which was above the market price. a) Draw a diagram showing supply and demand for bread, and the effects of the policy. Did the policy act as a price ceiling or a price floor? b) What kinds of inefficiencies were likely tơ arise when the controlled price of bread was above the market price? Explain in detail. One year during this period, a poor wheat harvest caused a leftward shift in the supply of bread and therefore an increase in market prices. New York bakers found that the controlled price of bread was now below the market price. c) Draw the diagram showing the effect of the price control on the market for bread during this one year period. Did the policy act as a price floor or price ceiling? d) What kinds of inefficiencies occurred during that period?

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 9PA

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Similar questions

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