macro economic question how do you solve this?

Question

In a competitive market, the market demand is Qd = 60 - 6P and the market supply is Qs = 4P. The full economic price under a price ceiling of $3 is
a) 6.
b) 7.
c) 8.
d) 9.

Answer 1

In a competitive market, supply equals demand, so the "full economic price" is where D-S=0, or:
60-6P-4P=0
P=6
which is choice a).

This is the equilibrium price regardless of whether there is a ceiling price or not. A ceiling price creates excess demand, because suppliers are willing to sell only 4(3) or 12 units, while the demand is 60-6(3), or 42 units. The ceiling price was thrown into the question to confuse you.

Answer 2

The answer is 8