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Consumer and producer surpluses in market

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Reference no: EM131326408

Assume that a competitive cell phone market has a demand curve described by the equation

P = 45 - (2)Q and a supply curve described by P = 5 + (2)Q.

(a). What are the consumer and producer surpluses in this market?

(b). What is the deadweight loss (DWL) if a price ceiling is set at Pmax = $19?

(c). Does either the consumer or producer surplus increase with the price ceiling imposed in (b)? Be sure to show your calculations and reasoning.

Reference no: EM131326408

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