Q1. Consider a competitive market for apples, where the demand is given by the equation: Qd= 100 - 6P, and the supply is given by the equation Qs= 50 + 4P.

a) Find the equilibrium price and quantity.

b) If government imposes a price of $4, what will be the quantity demanded and the quantity supplied in the market?

c) How would you explain this market situation? Give reasons.

d) If government imposes a price ceiling of $6, what will be the situation in this market? Use your answers above to explain. Calculations not needed.