Suppose that the demand curve for wheat is Q = 140 - 10p and the supply curve is Q = 10p. The government imposes a price ceiling of p = $4 per unit. a. How do the equilibrium price and quantity change? (round quantities to the nearest integer and round prices to the nearest penny) The equilibrium quantity without the price ceiling is 70 and the price without the price ceiling is $ 7. The equilibrium quantity with the price ceiling is 40 . b. What effect does this ceiling have on consumer surplus, producer surplus, and deadweight loss? The change in consumer surplus (CS) is $ (round your answer to the nearest penny). The change in producer surplus (PS) is $ (round your answer to the nearest penny). The deadweight loss (DWL) is $ (round your answer to the nearest penny).
Suppose that the demand curve for wheat is Q = 140 - 10p and the supply curve is Q = 10p. The government imposes a price ceiling of p = $4 per unit. a. How do the equilibrium price and quantity change? (round quantities to the nearest integer and round prices to the nearest penny) The equilibrium quantity without the price ceiling is 70 and the price without the price ceiling is $ 7. The equilibrium quantity with the price ceiling is 40 . b. What effect does this ceiling have on consumer surplus, producer surplus, and deadweight loss? The change in consumer surplus (CS) is $ (round your answer to the nearest penny). The change in producer surplus (PS) is $ (round your answer to the nearest penny). The deadweight loss (DWL) is $ (round your answer to the nearest penny).
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Suppose that the demand curve for wheat is
Q = 140 – 10p
and the supply curve is
Q = 10p.
The government imposes a price ceiling of p = $4 per unit.
a. How do the equilibrium price and quantity change? (round quantities to the nearest integer and round prices to the nearest penny)
The equilibrium quantity without the price ceiling is 7o and the price without the price ceiling is $ 7.
The equilibrium quantity with the price ceiling is 40.
b. What effect does this ceiling have on consumer surplus, producer surplus, and deadweight loss?
The change in consumer surplus (CS) is $
(round your answer to the nearest penny).
The change in producer surplus (PS) is $ (round your answer to the nearest penny).
The deadweight loss (DWL) is $ (round your answer to the nearest penny).
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