Question

When this market is in equilibrium, price is $ $6 and quantity bought and sold is 300 units. In equilibrium, consumer surplus is equal to $ and producer surplus is equal to $ . Assume government has imposed a price ceiling that requires sellers to charge a price of $4 (no higher). Given the new price, the quantity demanded is and the quantity supplied is , but the quantity bought and sold in this market will be . Using the price of $4 and the quantity bought and sold, consumer surplus is equal to $ , producer surplus is equal to $ , and deadweight loss is $ .

Answer 1

Answer: hello your question is incomplete attached below is the missing information

Answer :

$900

$600

Given the new price of $4 by Government

quantity demanded = 400 units

quantity supplied = 150 units

quantity bought and sold = 150 units

• $975

• $150

• $375

Explanation:

Consumer surplus ( area below demand curve and above $300  

= Area of triangle = 0.5 * base * height

= 0.5 * 300 ( 12 - 6 )  = $900

producer surplus ( area above supply curve and below $300

=  Area of the triangle = 0.5 * 300 ( 6-2 ) = $600

Given the new price of $4 by Government

quantity demanded = 400 units

quantity supplied = 150 units

quantity bought and sold = 150 units

Consumer surplus ( area of triangle + area of rectangle )

= 0.5 * 150 * ( 12-9 )+ L*B

= 0.5 * 150 * ( 3 ) + 150 * ( 9 - 4 )  = $975

producer surplus ( Area of triangle )

= 0.5 * 150 * (4-2) = $150

deadweight loss ( area of triangle )

= 0.5 * ( 300 - 150 ) ( 9-4 )

= $375