1. . T-Shirts Practice Problem #1 from handout: Price Floors S1 $1300 Q2
Quantity Demanded Falls to Q2
Quantity Supplied rises to Qs
End Result: too many T-Shirts
Surplus of Supply S1 .
$1300
Price Floor
Less T-Shirts sold!
The market Shrinks Q2
$1100 E1 D1 QS
1,000

2. Natural mkt. Equilibrium
Practice Problem #3 from handout
T-Shirts
No effect because
It does not change the
Natural mkt. Equilibrium
Point E1 still works! S1 .
$1100 E1
Price Floor
$900 D1
1,000

3. . LCD TV’s Practice Problem #4: Price Ceilings S1 E1 Price Ceiling
End Result:
Market Shrinks to Q2
Quantity Supplied falls
Quantity Demanded Rises
Not enough TV’s
LCD TV’s S1 .
$900 E1
Price Ceiling
$700 D1
Shortage of Supply Q2
3,000

4. Natural mkt. Equilibrium
Practice Problem #4: Price Ceilings
LCD TV’s
No effect because
It does not change the
Natural mkt. Equilibrium
Point E1 still works! S1 .
Price Ceiling
$1000
$900 E1 D1
3,000