Assume that a competitive cell phone market has a demand curve described by the equation
P = 45 - (2)Q and a supply curve described by P = 5 + (2)Q.
(a). What are the consumer and producer surpluses in this market?
(b). What is the deadweight loss (DWL) if a price ceiling is set at Pmax = $19?
(c). Does either the consumer or producer surplus increase with the price ceiling imposed in (b)? Be sure to show your calculations and reasoning.