2008 AP Economics!!!

[blddrake44]

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3:
a) draw standard graphs. An effective ceiling is below the equilibrium level and leads to a shortage.
b) set Q @ MR = MC for profit maximization so Q1 and set Q @ P = MC for AE (allocative efficiency) so Q3
c) Making a profit equal to TR – TC = P1P3DF box

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<p>I’m pretty sure (c) is “Incurring a loss” because ATC is above P. Typo?</p>