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Assume the market supply curve is S(P) = 30P and the market demand curve is D(P) = 500 - 20P. a) Derive the competitive equilibrium price.

4. Assume the market supply curve is S(P) = 30P and the market demand curve is D(P) = 500 - 20P.
a) Derive the competitive equilibrium price.
b) Suppose that the government institutes a price ceiling of 5. Derive the welfare loss from price controls.
c) How much are producers willing to pay in order to get their legislators to remove the price ceiling?
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Economics-8086462.doc

market supply curve is S(P) = 30P and the market demand curve is D(P) = 500 - 20P.
a) Derive the competitive equilibrium price.
Answer;
At equilibrium, D(p) = S(p)
500 - 20P = 30P, implies...

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