The market for potatoes has been estimated to have these supply and demand relationships:

Qd = 16,000 - 4000P

Qs = -9,000 + 6000P

where P represents price per unit in RM, and Q represents sales per week in tons.

1. Plot the graph using the graph paper provided. Make sure you label the graphs.
2. Compute the equilibrium price and quantity.
3. At equilibrium, compute the revenue.
4. Assume that the government is imposing a price floor of RM2.00, how much is the revenue?
5. Calculate the amount of shortage or surplus when:

P = RM2.00

P = RM2.70

6. Calculate the market efficiency (original and new) when:

a. P = RM2.00

i. Consumer Surplus

ii. Producer Surplus

iii. Deadweight loss

iv. Who gains and who losses and by how much?

b. P = RM1.70

i. Consumer Surplus

ii. Producer Surplus

iii. Deadweight loss

iv. Who gains and who losses and by how much?

7.Based on your computation when prices are determined by the free market mechanism and when the government intervenes, what would be your recommendation? Should the market be determined by free-market mechanism or intervention? Provide THREE (3) justifications.