Suppose the market for rice is perfectly competitive. The market demand function is Q = 10 2P (or P = 5 1 2 ). The market supply function is Q = 3p 10 (or P = 1 3 (Q + 10)).

a) What is the equilibrium price and quantity in the market for rice? (2 marks)

b) What is the consumer surplus and the producer surplus in this market? (2 marks)

c) Suppose the government tries to help the producers by setting a price floor at 4.5. What would be the quantity transacted in the market? (2 marks) d) What is the deadweight loss caused by the price floor? (2 marks)