Essay
Consider the following equation: P = 50 - 0.5Q (Demand) and P = 2Q (Supply).Answer the following questions.
a.What is the market equilibrium price and quantity
b.What is the consumer surplus and producer surplus at the market equilibrium
c.Suppose that government sets a price ceiling of $30.What is the quantity supplied in the market now
d.What is the consumer surplus and producer surplus based on the new price
e.What is the loss of economic surplus due to the price ceiling
Correct Answer:
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a. Price is $40 and quantity is 20 unit...View Answer
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Correct Answer:
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