Part I - Demand and Supply Analysis

1. In a perfectly competitive market, the market demand curve is given by Qd = 200 5Pd, and the

market supply curve is given by Qd = 35Ps.

d) Find the consumer surplus and producer surplus under the price ceiling. Assume that

rationing of the scarce good is as efficient as possible. What is the net economic benefit in

this case? Does the price ceiling result in a deadweight loss? If so, how much is it?

e) Find the consumer surplus and producer surplus under the price ceiling, assuming that the

rationing of the scarce good is as inefficient as possible. What is the net economic benefit in

this case? Does the price ceiling result in a deadweight loss? If so, how much is

Please help by explaining also on how to calculate both cs and ps so i can understand!

thank you