Consider the following supply and demand functions q D = 12 - 3 p q S =
Fantastic news! We've Found the answer you've been seeking!
Question:
Consider the following supply and demand functions
qD = 12 - 3p
qS = -3 + 2p
Using the supply and demand functions, suppose a price ceiling of p = 2 were implemented.
- How much is supplied to the market and how much is demanded?
- What is the excess demand?
- Calculate the consumer surplus, producer surplus, and welfare level without the priceceiling.
- Calculate the consumer surplus, producer surplus, welfare level, and dead weight loss withthis price ceiling.
- What if the price ceiling were p =4? How would our results change?
Related Book For
Posted Date: