The demand curve for wheat is Q=140−10p Supply curve is Q=10p.   Equilibrium quantity is 70.  Equilibrium price is $7.    The government imposes a price ceiling of p=$3 per unit. Equilibrium quantity with the price ceiling is 30.   What effect does this ceiling have on consumer​ surplus, producer​ surplus, and deadweight​ loss?

Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter4: Markets In Action
Section: Chapter Questions
Problem 3SQ
icon
Related questions
Question
The demand curve for wheat is Q=140−10p
Supply curve is Q=10p.
 
Equilibrium quantity is 70.  Equilibrium price is $7. 
 
The government imposes a price ceiling of p=$3 per unit.

Equilibrium quantity with the price ceiling is 30.  

What effect does this ceiling have on consumer​ surplus, producer​ surplus, and deadweight​ loss?

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Price Control
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Micro Economics For Today
Micro Economics For Today
Economics
ISBN:
9781337613064
Author:
Tucker, Irvin B.
Publisher:
Cengage,
MACROECONOMICS FOR TODAY
MACROECONOMICS FOR TODAY
Economics
ISBN:
9781337613057
Author:
Tucker
Publisher:
CENGAGE L
Survey Of Economics
Survey Of Economics
Economics
ISBN:
9781337111522
Author:
Tucker, Irvin B.
Publisher:
Cengage,
Economics For Today
Economics For Today
Economics
ISBN:
9781337613040
Author:
Tucker
Publisher:
Cengage Learning
Microeconomics
Microeconomics
Economics
ISBN:
9781337617406
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Economics (MindTap Course List)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning