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1.Demand is given by p = 11 - q and supply is given by p = 2 + 2q. a.What is the equilibrium price and

1.Demand is given by p = 11 - q and supply is given by p = 2 + 2q.

a.What is the equilibrium price and quantity in this market?

b.Calculate consumer and producer surplus in equilibrium. HINT: Draw a diagram.

c. Now assume that a price ceiling of $4 is put in place. What is excess demand at this price?

d.What is the deadweight loss associated with introducing the price ceiling? HINT: Find the DWL triangle in the diagram and then calculate.

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