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Assume the market demand and market supply functions for pears in the United States are given...

Assume the market demand and market supply functions for pears in the United States are given by QD = 36 - 3p and Qs= =6 + 4p, respectively. p represents the price of pears.

a) Find producer and consumer surplus when the market is in equilibrium.

b) Suppose the federal government introduces a price ceiling of $5.50.

a. Compute and graphically show the impact of the program on producer

surplus.

b. Calculate and graphically show the impact of the program on consumer

surplus.

c. How does the government implement the program?

d. What is the deadweight loss of this policy? (calculate and show graphically)

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