Question

A market is described by the following supply and demand curves:

Q^S = 2P

Q^D = 400 - 3P

Solve for the equilibrium price and quantity.

If the government imposes a price ceiling of $70, does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity demanded, and size of the shortage or surplus?

If the government imposes a price floor of $70, does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity demanded, and size of the shortage or surplus?

Instead of a price control, the government levies a tax on producers of $20. As a result, the new supply curve is:

Q^S = 2(P-20)

Does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity demanded, and size of the shortage or surplus?