Question

Suppose demand and supply are given by Q^d = 50 - P and Q^s = 1.0P - 10.

a. What are the equilibrium quantity and price in this market?

Equilibrium quantity: ?

Equilibrium price: $ ?

b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $45 is imposed in this market.

Quantity demanded: ?

Quantity supplied: ?

Surplus: ?

c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $25 is imposed in the market. Also, determine the full economic price paid by consumers.

Quantity demanded: ?

Quantity supplied: ?

Shortage: ?

Full economic price: $ ?