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Consider a market characterized by the following inverse demand and inverse supply functions:
Inverse Demand: P = 10 - 2Qd Inverse Supply: P = 2 + 2Qs
a. Find the equilibrium price and quantity in this market.
b. Compute the surplus received by consumers and producers.
c. Find the equilibrium price and quantity in this market.
d. Suppose the government decides to impose a price ceiling of $4. Computer the surplus received by consumers and producers.
e. Calculate the dead-weight loss to society imposed by this price control.
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