1) Welfare Analysis: Price Ceiling (12 points) Consider the market for widgets shown in the graph below (in this context, widgets are generic mechanical products as opposed to the icons on your phone). Supply and Demand for Widgets a. Start by calculating consumer, producer, and total surplus with the market in equilibrium. Price Enter your answers in the table below, and show as much work as possible. $22 ~ $20 b. Now suppose the government imposes a price ceiling of $6 per widget Draw the price $18 ceiling on the graph and clearly label the $16 new quantities supplied and demanded\" 31 4 c What is the new quantity sold with the price $12 ceiling in place? ' $10 ' $8 36 d. What disequilibrium situation is created by $4 the price ceiling, and what is its magnitude? S2 0 20 4o 60 so we 120 140 Q uantity 5 representing consumer and producer surplus with the price ceiling in place. Then complete the welfare analysis of the intervention by calculating each and lling in the table below. In the "change\" column, note whether each increased, decreased, or stayed the same. Again, show as much work as possible. quilibrium With Price Ceiling e. On the graph, clearly label the area E