The government decides it wants to make basic bicycles more affordable, so it passes a law requiring that all one-speed bicycles sell for $40, well below the market price. If the demand at a price exceeds the supply the buyer has to spend time searching for a seller and for waiting until he is served by the seller. Use the data below to calculate the lost gains from trade. Supply and demand are straight lines.

a. What is the total value of wasted time in the price-controlled market?

b. What is the value of the sum of lost consumer surplus and lost producer surplus?

The government decides it wants _ . . Price of to make basrc bicycles more bicycles affordable, so it passes a law requiring that all one-speed bicycles sell for $40, well below the market price. If the demand at a price exceeds the supply the $40 buyer has to spend time searching for a seller and for waiting until he is served by the seller. Use the 0 100 200 Quantity of data below to calculate the lost bicycles gains from trade. Supply and demand are straight lines. a. What is the total value of wasted time in the pricecontrolled market? b. What is the value of the sum of lost consumer surplus and lost producer surplus? $80