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Q. 12P Qs = -400 + 20P
A) Solve for market equilibrium price and quantity. Illustrate your answer with a diagram of market.
B) What are dollar values of consumer and producer surplus?
C) Suppose government imposes a price ceiling of $40. What is quantity demanded and quantity supplied? What type of disequilibrium exists? Recalculate consumer and producer surplus. What is deadweight loss?
D) Suppose demand curve shifts to Qd = 2500
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