Assume a perfectly competitive industry. Given the demand curve QD= 30 -2P(or P = 15-(1/2)QD) and the market supply curve QS= P find producer and consumer surplus. Consider the following three situations
a) If there is a price ceiling set $2 below the equilibrium price find producer and consumer surplus as well as the deadweight loss, if any.
b) If there is a market quota at 4 units below the equilibrium quantity find producer and consumer surplus as well as the deadweight loss, if any.
c) If a tax of $3 per unit is imposed on firms how is the burden of the tax shared between consumers and firms?