Question

1- Create a hypothetical market (make a table showing values for Supply and Demand)

2- Write The supply & demand equations showing the slope and intercept.

3- Calculate consumer surplus and producer surplus in this market.

4- Show on two separate graphs the impact of a price floor and a price ceiling on the market. On each graph show the market shortage and market surplus resulted from Price ceiling and Price floor.

plesse show table

Answer 1

a)

Price	Demand	Supply
0	100	0
2	90	10
4	80	20
6	70	30
8	60	40
10	50	50
12	40	60
14	30	70
16	20	80
18	10	90
20	0	100

At equilibrium, demand equals supply

100 - 5P = 5P

P = 10

At this Price, Q = 50

b) Demand equation: Q = 100 - 5P

100 is the intercept here and -5 is the slope.

Supply equation: Q = 5P

Slope of supply curve = 5 and intercept is 0.

c)

Producer surplus is area of portion B whose sum is (1/2) * (50 - 0) * (10 - 0) = 250 while consumer surplus is area of portion A whose sum is (1/2) * (50 - 0) * (20 - 10) = 250

d)

Price ceiling at $5 have supply of goods equal to 75 units while demand of 25 units which creates surplus of 75 - 25 = 50 units.

At price floor of $15, demand of goods is 75 units while supply is 25 units creating shortage of 75 - 25 = 50 units.