Producer surplus from the equilibrium price and quantity

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A market has supply and demand curves that follow the following set of equations: Supply → P = 4QS + 10 Demand → P = -5QD + 280.

For both of these problems pictures are not required but the problems may be much easier if you draw some.

a) Find the equilibrium price and quantity in this market and the consumer and producer surplus from the equilibrium price and quantity.

b) If there is a ceiling price in this market of 90, find the new consumer and producer surplus. Use these numbers to find the size of the deadweight loss and explain from these numbers whether or not consumers, as a whole, would be in favor of this ceiling.

Reference no: EM131715276

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