30. Based on your answer to the Senate Foreign Relations Committee (Demonstration Problem 2–4), one of the senators raises a concern that the free market price might be too high for the typical Chinese citizen to pay. Accordingly, she asks you to explain what would happen if the Chinese government privatized the market, but then set a price ceiling at the Chinese equivalent of $1.50. How do you answer? Assume that the market demand and supply curves (in U.S. dollar equivalent prices) are still given by

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= Q-10-2P and Q = 2+2P