Hkcee 2010 Econ Paper 2 Q2 » 〈UPDATED〉

A price floor is effective (binding) only if set above the equilibrium price. Since equilibrium price is already $68, a minimum price at $68 is non-binding . The market will continue to clear at the equilibrium quantity of 16 tonnes. No surplus or shortage occurs.

The net effect on MTR’s total revenue is ambiguous without elasticity magnitudes, but the was that total revenue would likely fall further because: hkcee 2010 econ paper 2 q2

To an outsider, this was just a Friday night. To an economist, Leo was facing the fundamental problem of . His time was finite, but his desires were not. A price floor is effective (binding) only if