1.4. Let's count the value oflost gains from trade in a regulated market. The government decides it wants to make basic bicycles more affordable, so it passes a law requiring that all one-speed bicycles sell for $30, well below the market price. Use the data below to calculate the lost gains from trade, just as in Figure 5.3. Supply and demand are straight lines.

Price of bicycles

$80 30 100 200 Quantity of bicycles

a. What is the total value of wasted time in the price-controlled market?

b. What is the value of the lost gains from trade?

c. Note that we haven't given you the original market price of simple bicycles-why don't you need to know it? (Hint: The answer is a mix of geometry and economics.)