(d) Suppose the demand function of a good is Pd = 100 -0.5Qd and the supply function is Ps= 10 +0.5Qs. The government is concerned that the market price is too high and imposes a price ceiling of Rs 40. Let the equilibrium price Rs 55 and the equilibrium qty 90=(90,55) Calculate the change in producer's surplus and the change in consumer's surplus due to the implementation of a price ceiling of Rs 40 & Calculate the profit made by black marketers if a black market operated in this market
(d) Suppose the demand function of a good is Pd = 100 -0.5Qd and the supply function is Ps= 10 +0.5Qs. The government is concerned that the market price is too high and imposes a price ceiling of Rs 40. Let the equilibrium price Rs 55 and the equilibrium qty 90=(90,55) Calculate the change in producer's surplus and the change in consumer's surplus due to the implementation of a price ceiling of Rs 40 & Calculate the profit made by black marketers if a black market operated in this market
Chapter4: Markets In Action
Section: Chapter Questions
Problem 1SQP
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Transcribed Image Text:(d) Suppose the demand function of a good is Pd = 100 -0.5Qd and the supply
function is Ps = 10 + 0.5Qs. The government is concerned that the market price is
too high and imposes a price ceiling of Rs 40.
Let the equilibrium price Rs 55 and the equilibrium qty 90=(90,55)
Calculate the change in producer's surplus and the change in consumer's surplus
due to the implementation of a price ceiling of Rs 40 & Calculate the profit made by
black marketers if a black market operated in this market
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