The demand and supply functions of rice is given as P = 200 – 0.5Q and P = 100 + 0.5Q respectively. Solve for the equilibrium price and quantity in the rice market. If the government implements a price floor of $180 per unit of rice, compute the consumer surplus, the producer surplus and the deadweight loss in the rice market. Support your answers with a suitable rice market diagram and comment on the winner and loser under this policy. (b)

The demand and supply functions of rice is given as P = 200 – 0.5Q and P = 100 + 0.5Q respectively. Solve for the equilibrium price and quantity in the rice market. If the government implements a price floor of $180 per unit of rice, compute the consumer surplus, the producer surplus and the deadweight loss in the rice market. Support your answers with a suitable rice market diagram and comment on the winner and loser under this policy. (b)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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