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Solved: Review Figure 3.4. Suppose the government decided that, since gasoline is a

Chapter 3, Problem 36

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QUESTION:

Review Figure 3.4. Suppose the government decided that, since gasoline is a necessity, its price should be legally capped at $1.30 per gallon. What do you anticipate would be the outcome in the gasoline market?

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QUESTION:

Review Figure 3.4. Suppose the government decided that, since gasoline is a necessity, its price should be legally capped at $1.30 per gallon. What do you anticipate would be the outcome in the gasoline market?

ANSWER:

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There would be a shortage of gasoline in the market if the price of gasoline is capped at $1.30 per gallon.

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