1. A market has supply and demand curves that follow the following set of equations: Supply...

Question:

1. A market has supply and demand curves that follow the following set of equations: Supply P = 30s + 6 Demand P = -20p + 146. For both of these problems pictures are not required but the problems may be much easier if you draw some. a) Find the equilibrium price and quantity in this market and the consumer and producer surplus from the equilibrium price and quantity. (1 point) b) If there is a ceiling price in this market of 78, find the new consumer surplus as well as the new producer surplus. Use these numbers to find the size of the deadweight loss. (1 point) c) Explain why, based on the numbers calculated above, someone could argue that, as a group, consumers are better off with the ceiling price even though some individual consumers are worse off with the ceiling price. (1 point)

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