A recent study found that the demand and supply schedule for Frisbees are as follows:
Price per Frisbee Quantity Demanded Quantity Supplied
$11 1 million 15 million
10 2 12
9 4 9
8 6 6
7 8 3
6 10 1
(a) What are the equilibrium price and quantity of Frisbees?
(b) Frisbee manufacturers persuade the government that Frisbee production improves scientists' understanding of aerodynamics and thus is important for national security. A concerned Parliament votes to impose a price floor $2 above the equilibrium price. What is the new market price? How many Frisbees are sold?
(c) Irate students march on Ottawa and demand a reduction in the price of Frisbees. An even more concerned Parliament votes to repeal the price floor and impose a price ceiling $1 below the former price floor. What is the new market price? How are many Frisbees are sold?