a) Draw the supply and demand curves identified by the points on the table. b) What is the elasticity of demand for a reduction in price from $1.50 to $1?

The table below describes the toy in the store

Price (per unit)	Quantity Demanded	Quantity Supplied
$2	0M	8M
$1.50	2M	6M
$1	4M	4M
$0.50	6M	2M
$0	8M	0M

a) Draw the supply and demand curves identified by the points on the table.

b) What is the elasticity of demand for a reduction in price from $1.50 to $1?

c) Draw the new supply line based on the following tax: $0.50 per unit for first 1.5M units and $1 per unit for all units 1.5M units and above.

d) What is the new equilibrium price and quantity

e) How much tax revenue was raised?

f) Draw the dead weight loss triangle on the graph.

g) Explain what dead weight loss is and why it happens when there is a tax.

h) Estimate the area of dead weight loss.

Expert Solution

Rahul Sunny answered 2 years ago

Draw supply and demand curves. Assume that these are the supply and demand curves for the...

Draw supply and demand curves. Assume that these are the supply and demand curves for the Microsoft Surface tablet. Draw what happens on this graph when the price of iPads decreases. Surface tablets and iPads are substitute goods. Clearly illustrate and label all equilibrium points, prices, and quantities.

What is elasticity? What is price elasticity of demand? What is price elasticity of supply?

make a detail comparison between demand and supply curves and elasticity and elasticity curves .

Explain the concepts of cross-price elasticity of demand and income elasticity of demand. (10 points) What...

Explain the concepts of cross-price elasticity of demand and income elasticity of demand. (10 points) What do positive and negative values indicate for each of these demand elasticities?

what is the elasticity of demand between points a and b if point A is (10,54)...

what is the elasticity of demand between points a and b if point A is (10,54) and point B is (20,44)

According to the midpoint method, the price elasticity of demand between points A and B is approximately _______ .

6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in San Diego. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $30, $45, $60, $75, $90, $105, and $120 per bike. According to the midpoint method,...

The price elasticity of demand is -1.25, and the price elasticity of supply is 1.25. What...

The price elasticity of demand is -1.25, and the price elasticity of supply is 1.25. What is the consumer's burden from a 26 cent tax? a. 13 cents b. 26 cents c. Insufficient information to know

If the price increases from $ 1.50 to $ 2.50, what would be the price elasticity...

If the price increases from $ 1.50 to $ 2.50, what would be the price elasticity of the demand of the faculty and students? (use the midpoint method for your calculations) What reason could there be for students to have a different elasticity to faculty? Price amount demand (Faculty) amount demand (students) $1.00 500 5,000 $1.50 450 4,000 $2.00 400 3,000 $2.50 350 2,000

Compare and contrast the price elasticity of supply and also price elasticity of demand. What is...

Compare and contrast the price elasticity of supply and also price elasticity of demand. What is an example of a good or service you buy where your demand is price elastic, so its price is important to your decision to buy it or not? Also define income elasticity and how it distinguishes between normal and inferior goods and please give an example of a normal and an inferior good.

on a graph, draw the supply and demand curves for juul pods, labeling the equilibrium price...

on a graph, draw the supply and demand curves for juul pods, labeling the equilibrium price and quantity(1 point). Now suppose the government imposes a per unit tax to be paid by sellers. on the same graph, show how this affects the supply and or demand curves and show the new equilibrium price and quantity ( 2 points ). label the price suppliers recieve, the price buyers pay, and the tax ( 2 points). label the areas of consumer surplus,...

Question