12 - Webs

where P represents price per unit in dollars, and Q represents rate of sales in units per year. a. Determine the equilibrium price and sales rate. b. Determine the deadweight loss that would result if the government were to impose a price ceiling of 40 dollars per unit. Answer: a. Equate supply and demand to get equilibrium values. 5 + 0.036Q = 100 - 0.04Q. 0.076Q = 95. Q = 1,250 units per ... ................
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