Professor: Dr. Moses Geepu-hlah Tiepoh Illustrative Exercises: Demand, Supply and Elasticity Applications (Government Intervention Through Price Controls Case of Price Ceiling) uestion 1: The Effects of Price Ceili from a Demand and So Table The following table contains hypothetical information about the price, demand for and supply of apples grown in Quebec. Use this table to answer the questions below: Price per bag Quantity Quantity Demanded (OD) Supplied {0;} Measured In Ba_s Measured In Ba i a. What are the equilibrium price and quantity of apples in this market? b. Now the government decides to impose a price ceiling of $2.00 per bag. What is the resulting excess demand (or shortage}? What would be the maximum black market price that results in this market? Sketch a graph showing the amount of the shortage and the black market price. c. Assume that all apple producers W. Graphically illustrate and calculate the effects of this ceiling on the consumer surplus producer surplus and deadweight loss. d. But now assume that producers ignore the ceiling. Graphically illustrate and calculate the effects of this ceiling on the consumer surplus, producer surplus, and deadweight loss. Suppose that the market demand equation for wheat is P = 50- 0.200 and the market supply equation is P = 15 + 0.105. [Quantity is in tons of wheat and price is in dollars}. a. What is the equilibrium price and equilibrium quantity of wheat? b. How the government decides to impose a price ceiling of $18.00 per ton of wheat. What would be the resulting excess demand [or shortage}? What would be the maximum black market price? c. Assume that all wheat producers WW. Graphically illustrate and calculate the effects of this ceiling on the consumer surplus, producer surplus, and deadweight loss. d. But now assume that producers ignore the ceiling. Graphically illustrate and calculate the effects of this ceiling on the consumer surplus, producer surplus, and deadweight loss