Fayetteville ECON 310 - the supply and demand of widgets

Consider the following information on the supply and demand of widgets.

1. In this context, using Excel Charts, set up a diagram showing the supply curve, the demand curve, the equilibrium price, and quantity.
2. Assume that the Government puts in place a price ceiling (i.e., a legal maximum price) of $6 per pound. Carefully explain how this will affect the quantity supplied, the quantity demanded, and the actual amount bought and sold. Specifically, using Excel Charts, set up a diagram showing the supply curve, the demand curve, the price Ceiling, and quantity that will actually be bought and sold in this market.
3. Assume that the government imposes a price floor of $ 21 per unit in this market. In the context of a supply and demand diagram, show exactly what will happen in the market and how much of a shortage or a surplus this will generate.
4. Calculate the total value of actual trade (defined as actual price multiplied by the actual quantity) in this market in the original equilibrium and also under the price controls described in parts b and c above.