Managerial Economics & Organizational Architecture 6th Edition by James Brickley , Clifford Smith ,Jerold Zimmerman

Exercise 44

Suppose that the demand curve for wheat is P = 100 - Q and the supply curve is P = Q. Find the equilibrium price and quantity. Calculate consumer and producer surplus. Suppose that the government imposes a price cap of 30. Show the effect graphically and calculate the resulting consumer surplus, producer surplus and deadweight loss.