This preview shows page 1. Sign up to view the full content.
Unformatted text preview: billion bushels. With a price ceiling of $4.00, we compute that: QS = (5)(4.00) 4 = 16.0 Qd = 28 (2)(4.00) = 20.0 The quantity that will actually be sold in the market is the quantity supplied. The new level of consumer surplus
is $96.00 billion, and the new level of producer surplus is $25.60 billion. The new level of aggregate surplus
is $121.60 billion Thus, the deadweight loss is $2.86 billion. The price ceiling in...
View Full Document
- Fall '13