Consider a market where supply and demand are given by QXS = -16 + PX andQXd = 83 - 2PX. Suppose the government imposes a price floor of $40, and agrees to purchase any and all units consumers do not buy at the floor price of $40 perunit.
a. Determine the cost to the government of buying firms' unsold units.
b. Compute the lost social welfare (deadweight loss) that stemsfrom the $40 price floor.