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1) Price Supply pmax Demand Q a) Explain why P*, the competitive equilibrium, is Pareto efficient. b) Suppose the government imposes a maximum price in

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1) Price Supply pmax Demand Q a) Explain why P*, the competitive equilibrium, is Pareto efficient. b) Suppose the government imposes a maximum price in the market of P. Identify the deadweight loss from prax c) Demonstrate that pmax and Q' are Pareto inefficient

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