I need answers to A B C with logical written out answers pl

I need answers to A, B & C with logical, written out answers please.

BUpload Assignment: Graded Ho X Microsoft Word-aleuzenev ewercis × G You French will never win the x+ ? https://blackboard viccnet.edu/bbcs webdav/pid-4030696-dt-content-rid-26993379_1/institution/CITL/Humanities Social an ? 1 of 6 -+Automatic Zoom Directions: The following graded exercises are designed to help you understand price floors and ceilings. You may use these sheets for your answers. Scan and submit your answers. Answers should be neat. Use full sentences to answer questions. Show all supporting calculations in a clear and logical manner R/L 1) A new government was recently elected in the country of Aleuzenev. Increases in the price of gasoline there have led to protests by the working class citizens whose votes brought the new government to power. In an attempt to prevent gasoline prices from taking too big of a bite out of the pockets of poorer citizens, the energy minister recently set a maximum gas price of 3 ravilobs per liter. (The ravilob (R) is the Aleuzenevan currency.) The market for gasoline in Aleuzenev is shown to the right. 2 Millions of liters/year 2 4 6810 a) Does this 3 ravilob price constitute a price floor or a price ceiling? Is it \"effective\" in this instance? How do you know this? 3

Solution

A) ravilob price 3 is a price ceiling because it is the Maximum price that firm can Charge. Yes this price ceiling is effective since it is below Market price meaning price ceiling 3 is less than the Market price 5.

B) there will be shortage because the demand is greater than the supply. Shortage = quantity demanded - quantity supplied = 7- 3 = 4

C) the side effects are there will be production shortage meaning suppliers will not produce as much quantity demanded by consumers. Producers won\'t produce as much at the lower price, while consumers will demand more because the goods are cheaper.