Use the following market supply and demand functions to answer questions PD = 5000 − 25QD...

Use the following market supply and demand functions to answer questions

PD = 5000 − 25QD

PS = 15QS

Solve for the equilibrium price and quantity.

What is the consumer surplus and producer surplus generated by this market?

If there were an added fixed cost of production equal to 1000, what is the new equilibrium price and quantity? 1

How do the producer and consumer surpluses change, respectively, as a consequence of the additional fixed cost given in question 11? (Calculate the numerical value of the change)

Expert Solution

Rahul Sunny answered 2 years ago

The market for a product has the following inverse demand and supply functions Pd= 120 -...

The market for a product has the following inverse demand and supply functions Pd= 120 - Qd Ps = 0.5Qs. Suppose the state government levies a tax of $15 on each unit sold, imposed on the consumers. Find the prices that consumers pay (Pd) and the producers receive (Ps) and the new quantity traded in the market, Q**. Show on your diagram. What is the incidence of the tax on consumers and what on producers. How much money does the state...

The market for a product has the following inverse demand and supply functions Pd = 120...

The market for a product has the following inverse demand and supply functions Pd = 120 - Qd Ps = 0.5Qs. 1. Find the equilibrium price P* and quantity Q*. Show on a diagram 2. Find the consumer and producer surplus

The market for a product has the following inverse demand and supply functions Pd = 170...

The market for a product has the following inverse demand and supply functions Pd = 170 - Qd Ps = 20 + 0.5Qs Find the competitive equilibrium and show on a diagram. Find the consumer surplus and producer surplus. Suppose the government gives a per-unit subsidy of $15 to sellers on each unit sold. Find the new equilibrium (quantity traded, consumer and seller prices). Show on your diagram. What is the incidence of the subsidy on consumers and what on suppliers?...

Use the following demand and supply functions:

Use the following demand and supply functions: Demand: Qd= 900 - 60P Supply: Qs= -200 + 50PIf the price is currently $11, there is asurplus of 110 units.shortage of 240 units.surplus of 350 units.shortage of 700 units.

Use the following market demand and supply equations to answer questions a and b: 1.Qd=200-4P and...

Use the following market demand and supply equations to answer questions a and b: 1.Qd=200-4P and Qs=P+100 2.TC=0.05*(Q-100)^2 a.)Assume this market is a competitive market calculate the market's profit maximizing price, quantity, and profit. What will happen to profit in the long-run? b.)Assume this market is a monopolistically competitive market calculate the market's profit maximizing price, quantity, and profit. What will happen to profit in the long-run?

Use the information below to answer the following questions. The demand and supply curves facing a...

Use the information below to answer the following questions. The demand and supply curves facing a company producing a brand of coconut juice, orange Juice, are respectively given as follows:Qd =50-5PQs=2+3P.The company is contemplating to increase the price of the orange juice as a measure to raise more revenue to support a planned expansion programme. Questions i.What is the equilibrium price and quantity for the orange Juice? ii. What is the price elasticity of demand for the orange Juice? iii....

The market for cake donuts is given by the following supply and demand functions:

Equilibrium, Taxes, and SurplusThe market for cake donuts is given by the following supply and demand functions:qS = −10 + 2pqD = 30 − 2p(a) Graph the supply and demand curves. Make sure to label correctly. )Now, let’s assume a per unit tax of $2 is charged to the buyer. What is the new equilibrium quantity, new price paid by the buyer, and new price received by the seller? )Calculate the tax revenue and deadweight loss from this tax.

Table 1 below shows the schedule of demand and supply in the Market for Michigan wine. Use this table to answer the following questions.

Table 1 below shows the schedule of demand and supply in the Market for Michigan wine. Use this table to answer the following questions.MarketPrice (P )QuantityDemanded (Qd )Quantity Supplied (Qs )$01500$1012550$20100100$3075150$4050200$5025250$600300Explain why a price of $40 cannot be an equilibrium price in this market.Draw a figure (call it Figure 1) representing the Market for Michigan wine (i.e. demand and supply curves). Be sure to fully label the graph. You can assume that demand and supply are continuous between points.On Figure...

Suppose that the market for cigarettes is a competitive market and is described by the following supply and demand functions:

Suppose that the market for cigarettes is a competitive market and is described by the following supply and demand functions:Demand: QD = 100000 – 500PSupply: QS= – 20000 + 2000PWhere Q is the number of packets and P is the price per packet of cigarettes.(a) Calculate the equilibrium price and quantity and draw a diagram to illustrate your answer.(b) Show on your diagram and calculate the size of the:(i) Consumer surplus(ii) Producer surplus(iii) Total surplus(iv) Deadweight loss(c) Suppose the government...

Use the aggregate demand/aggregate supply framework to answer the following questions: (a) A sharp decline in...

Use the aggregate demand/aggregate supply framework to answer the following questions: (a) A sharp decline in the stock market due to an increase in corporate bankruptcies leads to a decline in consumer and business conﬁdence. What eﬀect would you expect this shock to have on output and inﬂation in the short-run? (b) The US government decides to lower military expenditures to reduce the budget deﬁcit. What eﬀect would you expect this shock to have on output and inﬂation in the...

Question