QUESTION 4

1. Suppose the market supply for Good X is given by Q_X^S= -100 + 5P_X.Compute and illustrate with completely labelled diagram the producer surplus if the equilibrium price of X is $100 per unit (show the relevant calculation).
2. The daily market demand and supply for beef in New york is given by:

Qd= 16,000 - 1,000P

Qs=2,000 + 1,000P

The quantity and price are measured in tonnes and Dollars, respectively.

1. Determine the equilibrium quantity and price in the above market,
2. Explain what will happen if the government imposes a price ceiling of $10 on the chicken.