Audio and hints Each spring, the town of Kitefield has a festival of kites. One year, newcomers arrive in Kitefield and establish a kite- production facility. Their presence shifts the supply curve to S2. As a result of the new competition, the Kitefield town council is concemed about a possible loss of income to the long-established kite makers in town. To protect their income, the council passes an ordinance forbidding the sale of kites at any price BELOW $18. Kite Demand and Supply S40 35 30 Price Floor 10 GS 100 200 300 S00 700 Ouantity of Kines 1. Analyze the effect of Kitefield's new ordinance or policy. Describe the type of policy enacted (Floor or Ceiling). a. b. Describe the problem it creates (Surplus or Shortages). C. Explain what causes the problem identified in part b Price per Kite

Audio and hints Each spring, the town of Kitefield has a festival of kites. One year, newcomers arrive in Kitefield and establish a kite- production facility. Their presence shifts the supply curve to S2. As a result of the new competition, the Kitefield town council is concemed about a possible loss of income to the long-established kite makers in town. To protect their income, the council passes an ordinance forbidding the sale of kites at any price BELOW $18. Kite Demand and Supply S40 35 30 Price Floor 10 GS 100 200 300 S00 700 Ouantity of Kines 1. Analyze the effect of Kitefield's new ordinance or policy. Describe the type of policy enacted (Floor or Ceiling). a. b. Describe the problem it creates (Surplus or Shortages). C. Explain what causes the problem identified in part b Price per Kite

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter23: Price-searcher Markets With Low Entry Barriers

Section: Chapter Questions

Problem 17CQ

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