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Create a diagram of any one of the four market interventions listed below. Tax Subsidy Price Ceiling Price Floor The graph must show: Original market

Create a diagram of any one of the four market interventions listed below.

  • Tax
  • Subsidy
  • Price Ceiling
  • Price Floor

The graph must show:

  1. Original market equilibrium
  2. The size of the tax or subsidy OR the level of the controlled price (depending on which intervention you choose)
  3. The final market quantity
  4. The area of deadweight loss (lost gains from trade) that results from this market intervention (shade it in and label it)
  5. All other appropriate labels (D, S, P, Q, etc.)

The graph must be done by hand.

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