Question: Market demand is given as Q d = 150 - 3P and the market supply is given as Q s = 2P + 50. The

Market demand is given as Qd = 150 - 3P and the market supply is given as Qs = 2P + 50. The price floor is $25.

(a) Draw the curves, find the intercepts and slopes.

(b) Is there a shortage or a surplus? Calculate it and show it graphically.

(c) Compare the total surplus before and after the price floor. What is the difference and what is it called?

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