a. Calculate the total economic surplus in this market at the
free-market equilibrium price and quantity.
b. Calculate the total economic surplus in this market when
a price ceiling at $7 is in effect.
c. After imposition of the price ceiling at $7, how many
units of this good are no longer being produced and
consumed per day compared to the free-market
equilibrium?
d. Calculate the deadweight loss that results from the
imposition of the price ceiling at $7.
e. Calculate the total economic surplus in this market when
a price floor at $11 is in effect.
f. Calculate the deadweight loss that results from the
imposition of the price floor at $11.
14. Consider the market for milk in Saskatchewan. If p is the price of
milk (cents per litre) and Q is the quantity of litres (in millions per
month), suppose that the demand and supply curves for milk are
given by
