Market demand is P=125-(3/8)Q Market supply is P=5+(1/8)Q. This time the government imposes a price floor of $45. That is, the price must be either at or above $45. a. Calculate the new equilibrium price and quantity. b. Calculate the new CS (Consumer Surplus) and PS (Producer Surplus). Who gains? Who loses? What is the deadweight loss?
Market demand is P=125-(3/8)Q Market supply is P=5+(1/8)Q. This time the government imposes a price floor of $45. That is, the price must be either at or above $45. a. Calculate the new equilibrium price and quantity. b. Calculate the new CS (Consumer Surplus) and PS (Producer Surplus). Who gains? Who loses? What is the deadweight loss?
Chapter4: Markets In Action
Section: Chapter Questions
Problem 3SQ
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Market demand is P=125-(3/8)Q
Market supply is P=5+(1/8)Q.
This time the government imposes a
a. Calculate the new
b. Calculate the new CS (
What is the
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