Explain all answers in step-by-step detail.

Explain all answers in step-by-step detail.

1) Use the following statements to answer this question:

I. When the government imposes a price ceiling below the equilibrium price, consumers are always better off.

II. When the government imposes a price ceiling below the equilibrium price, producers are always better off.

A) I is true; II is false

B) I and II are false

C) I is false; II is true

D) I and II are true

2) Suzanne sells specialized hair bows to area high school cheerleaders. She is the only hair bow maker using a patented clip that keeps the large bow from sliding out of the girls' hair. Suzanne estimates her elasticity of demand to be -1.2 and her marginal cost is $4. How much should she charge for the bows if she wants to profit maximize?

A) $8

B) $4

C) $24

D) $16

3) A new brand of breakfast cereal has been shown to make children get better grades in school. The inverse demand is P = 25 - .25Q, where Q represents the number of boxes of cereal sold per day and P represents price per box. If the marginal cost per box is $2, what is the profit-maximizing QUANTITY the firm should produce?

A) 13.5

B) 2

C) 46

D) 92

4) A new brand of breakfast cereal has been shown to make children get better grades in school. The inverse demand is P = 25 - .25Q, where Q represents the number of boxes of cereal sold per day and P represents price per box. If the marginal cost per box is $2, what is the profit-maximizing PRICE the firm should charge?

A) $11.50

B) $2

C) $13.50

D) $23