Overview
Consider a market for smartphones, which is initially in equilibrium. Discuss the following scenarios in terms of their effects on the market equilibrium:
a) The government imposes a price ceiling below the current equilibrium price. b) An increase in consumer income leads to a rise in the demand for smartphones. c) Technological advancements reduce the production costs of smartphones.
In each scenario, analyze the impact on price, quantity, consumer surplus, producer surplus, and any potential deadweight loss. Provide detailed explanations and graphical representations where appropriate.