**Problem 10:**Suppose the demand function is given by $ Q_D = 12 - P $ and the supply function is given by $ Q_S = 3 \cdot P $. **Question:** What is the price cap that would produce the same amount of deadweight loss as a quantity cap of 2 units?This problem involves finding the price cap in a market characterized by specific linear demand and supply functions, ensuring the deadweight loss is equivalent to imposing a quantity restriction of 2 units.

Here we calculate the price, quantity and dead weight loss which are as follow-

Answered: 10. Suppose QD = 12 – P and Qs = 3•P.…

10. Suppose QD = 12 – P and Qs = 3•P. What is the price cap that would produce the same amount of deadweight loss as a quantity cap of 2 units? %3D

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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