In: Economics

Consider the following supply and demand equations: Supply: p = 10 + q Demand: p = 100 − 2q Show your work as your respond to the following questions.

(a) What is the market equilibrium price and quantity?

(b) What is the Total Surplus at equilibrium?

(c) The government enacts a price ceiling at ¯p = 50. What is the Total Surplus?

(d) Calculate the Consumer Surplus under a price ceiling of ¯p = 20.

(e) What is the Deadweight Loss under a price ceiling of ¯p = 10?

Given demand curve is : p=100-2q. When p=0,q=50 and when q=0,p=100. Thus, the demand curve has a vertical intercept of 100 and a horizontal intercept of 50.

Again, supply curve is : p=10+q. When q=0,p=10 and when q=50,p=60. Thus, the supply curve is a straight line that passes through the points (0,10) and (50,60).

In the diagram below, we have plotted the demand and supply curves as :

a) Equilibrium is attained at the point where Demand = Supply

or, 100-2q = 10+q

or, 3q = 90

or, q = 30 units is the equilibrium quantity

and p = 100-(2*30) = $40 is the equilibrium price

b) Total surplus = consumer surplus Area (A+B+C) + producer surplus Area (D+E+F+G)

or, Total surplus = {1/2*(100-40)*30} + {1/2*(40-10)*30}

or, Total surplus = (1/2*60*30) + (1/2*30*30)

or, Total surplus = 900+450

or, Total surplus = $1,350

c) When there is a price ceiling at p=50, quantity demanded q = 25 units.

Then, consumer surplus Area (A) = 1/2*(100-50)*25 = $625

and producer surplus Area (B+D+F+G) = 1/2*(40+15)*25 = $687.50

Then, total surplus = $1,312.50

d) Under price ceiling of p=20, quantity supplied = 10 units

Then, consumer surplus = Area (A+H+B+D+F)

or, consumer surplus = 1/2*(60+80)*10

or, consumer surplus = $700

e) Under a price ceiling of p=10, quantity supplied = 0

Thus, total surplus = 0

Then, dead-weight loss = total surplus in equilibrium condition (in b) = $1,350

Consider the following supply and demand equations:
Supply: p = 10 + q
Demand: p = 100 − 2q
Show your work as your respond to the following
questions.1
(a) What is the market equilibrium price and quantity?
(5%)
(b) What is the Total Surplus at equilibrium? (5%)
(c) The government enacts a price ceiling at ¯p = 50. What is
the Total Surplus?
D）Calculate the Consumer Surplus under a price ceiling of ¯p =
20.
(e) What is the...

Consider the following supply and demand equations:
Supply: p = 10 + q
Demand: p = 100 − 2q
Show your work as your respond to the following questions.1
(a) What is the market equilibrium price and quantity? (5%)
(b) What is the Total Surplus at equilibrium? (5%)
(c) The government enacts a price ceiling at ¯p = 50. What is
the Total Surplus?
D）Calculate the Consumer Surplus under a price ceiling of ¯p =
20.
(e) What is the...

Consider the following supply and demand equations: Supply: p =
10 + q Demand: p = 100 − 2q Show your work as your respond to the
following questions.
(a) What is the market equilibrium price and quantity?
(b) What is the Total Surplus at equilibrium?
(c) The government enacts a price ceiling at ¯p = 50. What is
the Total Surplus?
(d) Calculate the Consumer Surplus under a price ceiling of ¯p =
20.
(e) What is the Deadweight...

Consider the following supply and demand equations:
Supply: p = 10 +
q
Demand: p = 100 −
2q
Show your work as you respond to the
following questions.
What are the market equilibrium price and quantity?
(5%)
What is the Total Surplus at equilibrium?
(5%)
The government enacts a price ceiling at ¯p =
50. What is the Total Surplus? (5%)
Calculate the Consumer Surplus under a price ceiling of
¯p = 20. (5%)
What is the Deadweight Loss...

Consider the following supply and demand equations: Supply: p =
550 + 3q
Demand: p = 750 − 2q
Show your work as you respond to the following questions.
(a) What is the market equilibrium? (5%)
(b) What is the Total Surplus at equilibrium? (5%)
(d) The government imposes a price floor of 706. What is Total
Surplus? What is the Deadweight Loss? (10%)
(e) Instead, the government imposes a price floor of 650. What
is Total Surplus? What is...

Supply and Demand Use the following equations: (1) P = 4 + Q (2)
P = 12 – 3Q a.
Please show steps:
a. Which equation represents the supply curve, and which
represents the demand curve? How do you know?
b. What is the equilibrium price and quantity in this
market?
c. Graph the supply and demand curves for these equations.
d. Suppose the price is $8. What is the new Qs and Qd? What type
of disequilibrium situation exists,...

Consider the following demand and supply equations in the
market for labour.
Supply: W = 10 + (1/3)
L
Demand: W = 1,000 −
(2/3) L
Show your work as you respond to the following questions.
What is the market equilibrium wage and quantity?
(5%)
The government implements a minimum wage of W
= 370. What is the Consumer Surplus? (5%)
Calculate the Producer Surplus under a minimum wage of
W = 370. (5%)
Find the Deadweight Loss under a...

Consider the following demand and supply equations in the
market for labour.
Supply: W = 10 + (1/3)L
Demand: W = 1, 000 − (2/3)L
Show your work as you respond to the following
questions.
(a) What is the market equilibrium wage and quantity?
(b) The government implements a minimum wage of W = 370.
What is the Consumer Surplus?
(c) Calculate the Producer Surplus under a minimum wage of W =
370.
(d) Find the Deadweight Loss under a...

1: Assume the following demand and supply equations:
Demand: Q = 480 - 35P
Supply: Q = 200 +16P
What is the equilibrium Price? What is the equilibrium
quantity?
2: Define the four product markets with at least one example of
each example. How is the oligopoly market different from the other
three types of market?

1:
Assume the following demand and supply equations:
Demand: Q = 480 - 35P
Supply: Q = 200 +16P
What is the equilibrium Price? What is the equilibrium
quantity?
2: Define the four product markets with at least one example of
each example. How is the oligopoly market different from the other
three types of market?

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