Now let's calculate areas on the graph in situations where price limitations exist. Algebra time!

Concept #1: Graph Intuition

Example #1: The Steps We've Done Before

Practice: The supply and demand curves for a product are as follows. What is producer surplus if a price floor of $21 is set? 

QD = 45 - 2P
QS = -15 + P

Practice: The supply and demand curves for a product are as follows. What is deadweight loss if a price ceiling of $2 is set? 

QD = 600 - 100P
QS = -150 + 150P