Since 1996, market prices for helium have seen consistent increases based on hig

Question

Since 1996, market prices for helium have seen consistent increases based on high demand in the technology sector. Many households have felt the impact directly when purchasing helium for birthday balloons The US government controls roughly 75% of the world's helium supply, and in 1996, it set a price floor for the helium market. which outlaws the sale of helium below $64 for 1,000 cubic feet. Suppose that the graph below illustrates the market for helium after the price floor was implemented. Price $15,000 so 500 1000 1200 1800 (a) Because the price floor is set below the equilibrium price, the price control is

Explanation / Answer

(a) Solution: nonbinding

Explanation: A non-binding price control is not considered to be an economic issue because it does not affect the equilibrium price.

(b) Solution: have no effect

Explanation: A price floor of $64 will create a nil impact on the quantity of helium gas bought and sold.

(c) Solution: 1000

Explanation: The quantity bought at equilibrium is 1000 cubic feet.

(d) Solution: 1000

Explanation: The quantity sold at equilibrium is 1000 cubic feet

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