For each of the following separate parts, you are required to draw a graph.

(a)Suppose a binding price ceiling is imposed on the market for gas. Draw a graph to show the effects of price ceiling. On the same graph, show the effects of the binding price ceiling in long run. Indicate the shortage or surplus in short run and long run. (Hint: how do price elasticity of demand and price elasticity of supply change in long run?)

(b)Supply of good A is perfectly inelastic. Suppose a tax is levied on buyers. Draw a graph to show the impacts on the market for good A. Your graph should indicate the CS, PS, tax revenue and DWL after tax.

(c)Suppose a binding price floor is imposed on the market for wheat. Draw a graph to show the effects of price floor. Indicate the shortage or surplus. Suppose more people choose to eat rice, demand for wheat decreases. (Price elasticity of demand remains unchanged) On the same graph, illustrate how the change in consumer preferences will affect the market for wheat. Indicate the new shortage or surplus.