The demand and supply equations for the wheat market are:
Demand: P=20−0.02Q
Supply: P=0.04PSupply: P=0.04Q
- a. Calculate the equilibrium price and quantity.
- b. What are the consumer surplus and the producer surplus at the market equilibrium?
- c. If a price floor of 15 TL is imposed, calculate the consumer and producer surpluses and the deadweight loss.
2.
The demand and supply equations for the orange market are: Demand: P=30−0.03QDemand: P=30−0.03Q Supply: P=0.05QSupply: P=0.05Q
- a. Find the equilibrium price and quantity.
- b. Determine the consumer surplus and producer surplus at equilibrium.
- c. Suppose the government sets a price ceiling of 12 TL. Calculate the new surpluses and the deadweight loss.