Problem
You are given that p=50-4*q is the inverse demand curve and p=10+6*q is the inverse supply curve.
1) What is the equilibrium price quantity pair if the market is perfectly competitive?
2) Illustrate the effect of a price floor set at $46 on the graph and solve for the size of the difference between the quantity supplied and quantity demanded.
3) Illustrate the effect of a price ceiling set at $22 on the graph and solve for the size of the difference between the quantity supplied and quantity demanded.