Question
Impact of a price ceiling in the instant oatmeal market[Past exam question] The demand and supply curves for instant oatmeal are as follows:, where is
Impact of a price ceiling in the instant oatmeal market[Past exam question]
The demand and supply curves for instant oatmeal are as follows:, where is the quantity of instant oatmeal packets (in million units) demanded when the price consumers pay is .when is greater than or equal to 2; when < 2, where is the quantity of instant oatmeal (in million units) supplied when the price producers receive is .Suppose the Government imposes a price ceiling of $6 in the market for oatmeal.(a)What are the equilibrium price and quantity in the market without a price ceiling?(b)What is the size of the shortage in the market with the price ceiling? What is the producer surplus? (Hint: shortage is the difference between quantity supplied and quantity demanded.)(c)What is the consumer surplus? What is the total surplus/welfare? What is the deadweight loss?
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