Suppose that the demand for bananas is given by: Qd(p) = 1,500,000 – 50000p where Qd(p)...

Suppose that the demand for bananas is given by: Qd(p) = 1,500,000 – 50000p where Qd(p) is quantity demanded in kilograms of bananas and p is the price. Further suppose that there are many identical sellers in the domestic market who can each choose to plant bananas. If a seller chooses to produce bananas, she will incur a planting cost of $2.00 per kilogram at the beginning of the year and must pay an additional $0.50 per kilogram to harvest the bananas at the end of the year at the optimal farm scale of 12,500 kg of bananas. You may assume that the planting cost includes the opportunity costs associated with the allocated land. Thus, at the 2 beginning of the year (when both planting and harvesting costs are part of total opportunity cost), the total amount of bananas planted is given by: Qs(p) = { 0 if p < 2.50 [0, ∞] if p = 2.50 ∞ if p > 2.50 } Note that supply can be drawn as a straight horizontal line at a price of $2.50 Draw the supply and demand system and clearly mark the equilibrium outcome. Shade in the area that is the consumer surplus

Expert Solution

Rahul Sunny answered 7 months ago

Suppose the industry demand curve of bananas in the banana industry is given by equation p=10−qd...

Suppose the industry demand curve of bananas in the banana industry is given by equation p=10−qd .....(1) And the supply curve is given by 2 p = qs .............(2) There is an equilibrium price p* for which qd = qs = q* The equilibrium price in this market is $5 and quantity is 5. Suppose a price ceiling of $2 is imposed on this market The area of a right triangle is 12 Base Height ; The area of a...

Consider the following market. Demand is given by QD = 5 − P where QD is...

Consider the following market. Demand is given by QD = 5 − P where QD is the quantity demand and P is the price. Supply is given by QS = P/2 where QS is the quantity supplied. a. What is the market equilibrium quantity and price? b. Calculate consumer, producer, and total surplus. Depict your answer in a graph. c. Suppose the government imposes a price floor of P = 4. Calculate the consumer surplus, producer surplus, and deadweight loss....

Suppose that demand is given by P = 20 - Qd and supply is given by...

Suppose that demand is given by P = 20 - Qd and supply is given by P = 4 + Qs. Which of the following could represent the Social Marginal Benefit and Social Marginal Cost curves if there is a negative production externality? P = 16 - Qd and P = 2 + Qs P = 24 - Qd and P = 4 + Qs P = 20 - Qd and P = 2 + Qs P = 20 -...

Consider a market where demand is given by P = 60 - ⅓ Qd and supply...

Consider a market where demand is given by P = 60 - ⅓ Qd and supply is given by P = 20 + ⅓ Qs. Consumer Surplus is ________ amd Producer Surplus is?

Consider a market where demand is given by P = 50 - Qd and supply is...

Consider a market where demand is given by P = 50 - Qd and supply is given by P = 10 + Qs. After a tax of t = 4 is placed on producers Producer surplus is between 180 and 200 Producer surplus is between 220 and 240 Producer surplus is between 160 and 180 Producer surplus is between 200 and 220

Suppose demand and supply are given by Qd = 50 - P and Qs = 1.0P -...

Suppose demand and supply are given by Qd = 50 - P and Qs = 1.0P - 20. a. What are the equilibrium quantity and price in this market? Equilibrium quantity: ______________ Equilibrium price: $ ___________________ b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $44 is imposed in this market. Quantity demanded: ______________ Quantity supplied: ______________ Surplus: ________________ c. Determine the quantity demanded, the quantity supplied, and the magnitude of...

3) Suppose the demand curve for a particular product is given by Qd(P) = 600 –...

3) Suppose the demand curve for a particular product is given by Qd(P) = 600 – 20P. Suppose also that marginal revenue and marginal cost to a monopolist is described by the following two equations. Suppose price is measured in $/lb and quantity is measured in lbs. MR = 30 – (1/10)Q MC = (1/5)Q a) Determine the profit maximizing quantity, price, total revenue, and consumer surplus in this monopoly market.

PLEASE SHOW WORK Suppose demand and supply are given by Qd = 40 - P and...

PLEASE SHOW WORK Suppose demand and supply are given by Qd = 40 - P and Qs = 1.0P - 20. a. What are the equilibrium quantity and price in this market? Equilibrium quantity: Equilibrium price: $ b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $34 is imposed in this market. Quantity demanded: Quantity supplied: Surplus: c. Determine the quantity demanded, the quantity supplied, and the magnitude of the...

Problem 2. Suppose that demand for broccoli is given by QD = 1,000 – 5P, where...

Problem 2. Suppose that demand for broccoli is given by QD = 1,000 – 5P, where QD is quantity per year measured in hundreds of bushels and P is price in dollars per hundred bushels. The long-run supply curve for broccoli is given by QS = 4P – 80. a. Show that the equilibrium quantity here is Q = 400. At this output, what is the equilibrium price? How much in total is spent on broccoli? What is the consumer...

Demand is given by the equation QD=100-P; supply is given by QS= 4P Suppose the world...

Demand is given by the equation QD=100-P; supply is given by QS= 4P Suppose the world price of each unit is $25. Now assume that this economy is open to world trade. How many units will they import or export? Calculate the consumer surplus, producer surplus and total surplus. Help me solve, A Continue to assume that this economy is open to world trade. Suppose the government enacts a tariff off $2 per pound of cocoa beans. Calculate the consumer...

Question