Consider a competitive market where the market demand and the market sup- ply are given, respectively, by QD=500−2P and QS=2P (a) Find the competitive equilibrium price and quantity. (b) Suppose the government wants to help the producers by imposing a price floor of pf = 150. Assuming that the producers correctly anticipate the demand at price p f , find the consumer surplus, producer surplus, and the deadweight loss.
Consider a competitive market where the market
(a) Find the competitive
(b) Suppose the government wants to help the producers by imposing a
(c) Suppose, instead of using a price floor, the government decides to help the producers by imposing a per unit tax t in the market and then giving all the tax collected to the producers. What is the value of t that will make the producers equally well off as in part (b)? What is the resulting deadweight loss?
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