Consider a perfectly competitive market in which the market demand curve is given

by Qd = 20 - 2P and the market supply curve is given by Qs = 2Ps.

a. Find the equilibrium price and quantity in the absence of government

intervention.

b. Suppose the government imposes a price ceiling of $3 per unit. How much is

supplied?

c. Suppose, as an alternative, the government imposes a production quota

limiting the quantity supplied to six units. What is the market price under this

type of intervention? Is the quantity supplied under the price ceiling greater

than, less than, or the same as the quantity under the production quota?