# Suppose that the demand curve for organic tomatoes is Q = 120-10p, and the supply curve...

###### Question:

Suppose that the demand curve for organic tomatoes is Q = 120-10p, and the supply curve is Q=10p. The government imposes a price control of p = 4.

(a) Without government intervention, what is the equilibrium price and quantity?

(b) Without government intervention, what is the consumer surplus, producer surplus, and deadweight loss? Use a graph in your calculations.

(c) Is the price control a price ceiling or price floor? Why? With the price control, what is the new equilibrium price and quantity?

(d) With the price control, what is the new consumer surplus, producer surplus and deadweight loss? Use a graph in your calculations; you can apply the same graph in (b).

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