Question

the following demand and supply curves:
QD = 80,000 - 2,000P and QS = -25,000 + 5,000P

3.

1. What is the consumer surplus in this example of supply and demand?

2. What is the producer surplus in this example?

3. How much are the variable costs to the firm in this example?

4.

Suppose the government were to impose a price ceiling of $10 on the sale of

each unit sold in this market.

1. Is there a shortage or a surplus? By how much?

2. How many units will be sold in this market?

3. What is the marginal value to the consumer buying that

5.

1. What is the consumer surplus at the $10 price?

2. What is the producer surplus at this $10 price?

3. What is the deadweight loss as a result of this price ceiling?

Answer 1