Consider again the market for a type of equipment used by fans of crafting. As a...

Consider again the market for a type of equipment used by fans of crafting.

As a reminder, before the tax:

Vertical intercept, demand curve: 80
Vertical intercept, supply curve: 50
P* = $60
Q* = 40

And after:

The tax makes the price paid by buyers rise to $70 and the price received by sellers to fall to $55. With the tax, only 20 units are sold.

Calculate consumer surplus BEFORE the tax is applied. Carefully follow all numeric instructions.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Consider again the market for a type of equipment used by fans of crafting. As a...

Consider again the market for a type of equipment used by fans of crafting. As a reminder, before the tax: Vertical intercept, demand curve: 80 Vertical intercept, supply curve: 50 P* = $60 Q* = 40 And after: The tax makes the price paid by buyers rise to $70 and the price received by sellers to fall to $55. With the tax, only 20 units are sold. Calculate producer surplus AFTER the tax is applied. Carefully follow all numeric instructions.

For the next few questions, consider the market for a type of equipment used by crafting...

For the next few questions, consider the market for a type of equipment used by crafting enthusiasts to cut out die-cut shapes. It's a specialized market, so we'll just have to assume we have enough buyers and sellers to have our demand and supply curves be straight, smooth lines. The following information applies to the market before any tax is applied: Vertical intercept, demand curve: 80 Vertical intercept, supply curve: 50 P* = $60 Q* = 40 Later, a tax...

Taxes and welfare Consider the market for commercial fans. The following graph shows the demand and...

Taxes and welfare Consider the market for commercial fans. The following graph shows the demand and supply for commercial fans before the government imposes any taxes. First, use the black point (plus symbol) to indicate the equilibrium price and quantity of commercial fans in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area...

Consider again the market for ice cream. a.) Draw a graph of the supply and demand...

Consider again the market for ice cream. a.) Draw a graph of the supply and demand curves in the market for ice cream. Be sure to label the curves, axes, and the competitive equilibrium. b.) What is a price ceiling? Write a sentence. c.) Suppose that, in an effort to ensure that all consumers have access to ice cream at a fair price, the government imposes a binding price ceiling in the market for ice cream. Draw a graph of...

PA 9-4 Consider again the company making tires for... Consider again the company making tires for...

PA 9-4 Consider again the company making tires for... Consider again the company making tires for bikes is concerned about the exact width of their cyclocross tires. The company has a lower specification limit of 22.8 mm and an upper specification limit of 23.4 mm. The standard deviation is 0.19 mm and the mean is 23.1 mm. (Round your answer to 4 decimal places.) a.What is the probability that a tire will be too narrow? (Round your answer to 4...

The Japanese market is on the verge of rising again, and the UK market is doing...

The Japanese market is on the verge of rising again, and the UK market is doing better than the US market in the current economic recovery. Therefore, as a US investor, John is contemplating investing in the Japanese and UK stock markets. Using the historical data, John has estimated the means, volatilities, and correlation of the US, UK, and Japanese stock markets as the following: US UK Japan Means 0.120 0.150 0.084 St. Dev. 0.150 0.240 0.220 Correlation matrix: US...

Consider a market for used cars. Suppose that each car on the market is 1 of...

Consider a market for used cars. Suppose that each car on the market is 1 of seven possible levels of quality x={1000,2000,…,7000}. There is an equal amount of cars at each quality level. Each current owner (and potential seller) knows the quality (x) of the car that they have. (Note: We did not do a problem like this explicitly in class, but it is a very simplified version of the “A” insurance example from the notes.) a. Suppose that buyers...

Consider the pizza restaurants and explain the following issues. What is the type of market that...

Consider the pizza restaurants and explain the following issues. What is the type of market that this industry represents? Explain the concentration of the industry. Explain the relationship between the elasticity of the industry demand and that of an individual firm. Explain the pricing behavior of the firms in this industry. Explain the effect of a horizontal integration of all the firms in the industry on the pricing behavior of the merger. Given the merger in point 5, explain the...

explain the evaporation process based on the working principle, type of equipment used and operating condition...

explain the evaporation process based on the working principle, type of equipment used and operating condition in downstream process

The accompany data shows the demand for one type of chip used in industrial equipment from...

The accompany data shows the demand for one type of chip used in industrial equipment from a small manufacturer. Month New Chip Introduced Demand 1 0 3894 2 0 3489 3 0 6083 4 1 10645 5 0 7697 6 0 7711 7 0 5427 8 0 8734 9 1 13048 10 0 7271 11 0 8614 12 0 7164 13 0 7401 14 0 9689 15 1 14506 16 0 8509 17 0 12159 18 0 14696 19 1...

Subjects