Beef Market
QD = 599,950 – 1.50P
QS = -50 + 3.5P
Q = quantity (ton)
P = price (Rp/kg)
Question: What will be the welfare impact if the government imposes a maximum price of beef Rp 100,000/kg
Hints:
Compute equilibrium QDe, QSe and Pe
Using the demand-supply equation, compute QDpmax and QSpmax if P = Rp 100.000
Based on the demand equation and QDpmax, compute the hypothetical price if the demand is QDpmax
Compute the DWL