Given the Demand and Supply functions:
Demand: Qd = 2000 –12P
Supply: Qs = -400 + 8P
a. Draw the demand and supply curve. Identify Consumer and Producer Surplus in the graph.
b. Find consumer surplus, producer surplus, and social welfare.
c. The government sets a price floor Pf = 150. Is the price floor effective? What is Quantity Traded?
d. Find the new consumer, producer surplus, social welfare and deadweight loss.
e. Redo part (c) and (d) with Price floor = 100