Seeing the huge demand for pens, the government decides to impose price controls on masks. Consider the following two scenarios for part a and for part bSuppose the government imposes a price ceiling at $1.Is it binding? Show whether there shortageor surplus in the demand-supply diagram above. How large is this surplus or shortage? Please Briefly explain your answers to the above. Now, Suppose the government imposes a price floor at $2.Is it binding? Show whether there is a surplus or a shortage in the demand-supply diagram above. How large is this surplus or shortage? briefly explain your answers to the above 1 c Complete the table below and submit the completed table in your answer TaxPrice paid by Buyers Price received by SellersQuantity of masks sold0 $1 on buyers $1 on sellers If the tax is $1 and it is on buyersWhat is the tax burden of buyers? Make your calculations clear. 3.525-Demand1- SupplyPensfuantyof Bna52.Price of a Pondollor

Hello, thank you for the question. Since there are multiple subpart questions posted here, only the first three subparts will be answered here as per the policy of Bartleby. If you need an answer to any other subpart, please repost the question by mentioning the required subpart number in it.1.1 The market equilibrium is obtained at the intersection of the market demand and supply which is obtained at $1.5 per unit and the equilibrium quantity demanded is obtained at 3 units. This can be clearly indicated as follows: When the government charges a price ceiling of $1, the price that the sellers can charge from consumers becomes $1. This means that the price ceiling will be below the market equilibrium and when the price ceiling is determined below the market equilibrium, and then the price ceiling is known as the binding price ceiling. Since the price is below the equilibrium level, the supply will be lower whereas the demand will be higher making a shortage in the economy which can be illustrated as follows: Thus, the quantity demanded will be 4 units whereas the quantity supplied will be 2 units in the market when the price ceiling is determined at $1 by the government. This means that there will be a shortage of 2 units in the market.1.2 The price floor is the minimum support price in the market. It is the minimum price that the producer should receive from the market which is determined by the government. The price floor is known as a binding price floor only when the determined floor price is above the market equilibrium level. In this case, the equilibrium is $1.5 and the price floor is determined at $2. This means that the price floor is binding as it is above the equilibrium. The price floor can be illustrated as follows: Since the market equilibrium price is below the floor price, the consumers will demand less whereas the suppliers will supply more. As a result, the demand will fall to 2 units whereas the supply increases to 4 units which makes a 2 units excess supply in the market.1.3 When there is no tax in the economy, the price paid by the consumer is $1.5 and the price received by the seller is $1.5. The quantity sold by the seller is 3 units. When the tax of $1 is imposed over the consumers, then the demand will shift to the left by $1 and as a result, the price paid by the consumer becomes $2 out of which $1 will go for tax making the price received by the seller equal to $1. Similarly, when the tax of $1 is imposed over the supplier, the supply curve will shift to the left indicating a lower supply and the result will cause the price paid by the consumer to become $2 out of which only $1 will go for the seller. In both situations, the quantity sold by the seller will be 2 units. Thus, the tax imposed on the buyer and seller in the perfect competition will have a similar impact on price and quantity. Thus, the table can be illustrated as follows: