A hurricane is forecasted to make landfall in the coming days in the coastal Florida town considered in question 3. The supply of gas generators is still given by the same equation as before (Qs = 2P - 200) but the demand for gas generators increases and becomes Qd = 2300 - 3P

Suppose either a price gouging law is in place or suppliers are reluctant to raise prices during a crisis due to the bad publicity this might generate. Therefore, in effect, there is a price ceiling on generators at the pre-hurricane equilibrium price that you found in question 3.

a.How many generators would be sold with the impending hurricane if there were no price ceiling?

b.How much of a shortage of generators are there due to the price ceiling?

c.Calculate the deadweight loss of the price ceiling.