Question one a) i)
The equilibrium price is eighteen dollars
The equilibrium quantity is one hundred and one
Question one a) ii)
If the government decided to impose a price control at twenty dollars, the quantity supplied by the suppliers is one hundred and thirty and the quantity demanded by the consumers is seventy-three. This means that the amount of T-shirts being supplied in the market by the suppliers is more than what the customers are demanding. However, if the government decides to drop down the regulation, the prices will try to stabilize themselves to the equilibrium point as the quantity being supplied and being demanded (Layton, Robinson and Tucker, 2009).
Question one a) iii)
If the unit cost price reduces by three dollars, the prices of the T-shirts will definitely reduce. This means that the suppliers will be able to continue supplying the products that they used to supply before. As a result, it will lead to the surplus production of the T-shirt. On the other hand, the demand for the t-shirts will tend to rise since they will be cheaper. However, it will take time before they are settled back to their normal equilibrium if the prices go back to normal (Layton, Robinson and Tucker, 2009).