Question 1 The demand curve for a toy is Q= 500-50P. The supply curve for the same toy is Q = 100+50P, where Q is the monthly sales and P is the selling price in dollars. a) 1)) Calculate the equilibrium price and quantity and construct a diagram for the market at the equilibrium. The market changes and results in a new demand curve: Q=60050P. Assuming all other factors in the market remain constant, calculate the new equilibrium price and quantity. Construct a diagram to illustrate the change of market equilibria. Apply appropriate economic theories to discuss three (3) possible causes for this change of market equilibria. Government considers the new equilibrium politically unattractive and thus plans to establish a price ceiling P=6. Develop a model to depict this price regulation and calculate the following after the price ceiling: changes in consumer surplus, producer surplus and total surplus respectively and the size of deadweight loss (DWL). (30 marks)