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1 If the market price is kept below the equilibrium price by a regul

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1. If the market price is kept below the equilibrium price
by a regulation, what does the demand and supply model
predict about the gap between quantity demanded and
quantity supplied? If, in the real world, there is a gap
between quantity demanded and quantity supplied, does it
necessarily imply that a regulation is keeping the market
price below the equilibrium price? L04
Solution
if the price is fixed by regulatories which less than
equilibrium price, the producers doesnot show interest to
produce the product for a long period. Because he will get
losses if he produce the product.
in real world if there is a gap between the quantity
demanded and quantity supplied, dont assume that it
happens because of lower price of the product, which is
fixed by regulatories.
there are many reasons to rise the gap between demand
and supply.

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1. If the market price is kept below the equilibrium price by a regulation, what does the demand and supply model predict about the gap between quantity demanded and quantity supplied? If, in the real world, there is a gap between quantity demanded and qu antity supplied, does it necessarily imply that a regulation is keeping the market price below the equilibrium price? L04 Solution if the price is fixed by regulatories which less than equilibrium price, the producers doesnot show interest to produce the product for a long period. Because he will get losses if he produce the product. in rea ...
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