A.[2] At a price of $2/dozen, the demand for person A is 1.2 dozen, and for person B it is 1.8 dozen. What is the total demand at a $2 price? Explain.

B.[2] What is the total consumer surplus if doughnuts are given away free? Why?

C.[2] If doughnuts cost $2/dozen to produce, but government puts a limit of one dozen per person, what is the deadweight loss of this policy? What is the intuition for your answer?

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