13-4) Demand is given by QD = 800 - 3P, and supply is given by QS...

13-4) Demand is given by Q_D = 800 - 3P, and supply is given by Q_S = -400 + 7P.

A) Find the equilibrium price and quantity. (5 points)

B) Compute the price elasticity of demand and the price elasticity of supply at the equilibrium. (6 points)

C) In a diagram, show the consumer and producer surplus at the equilibrium. Explain these surpluses. (6 points)

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Market demand is given as Qd = 200 – 3P. Market supply is given as Qs...

Market demand is given as Qd = 200 – 3P. Market supply is given as Qs = 2P + 100. In a perfectly competitive equilibrium, what will be price and quantity? Price will be $20 and quantity will be 140. Price will be $50 and quantity will be 260. Price will be $100 and quantity will be 300. Price will be $140 and quantity will be 380.

The demand and supply for a product is given by: Qd: 300-5P Qs: 3P-100 Suppose the...

The demand and supply for a product is given by: Qd: 300-5P Qs: 3P-100 Suppose the government imposes a tax T=$16 Calculate: A) Consumer surplus after tax B) Producer surplus after the tax C) Government Revenue D) Deadweight Loss

Demand Equation: QD = 250 − 5P Supply Equation: QS = 10 + 3P

Demand Equation: QD = 250 − 5P Supply Equation: QS = 10 + 3P 1. When P = 5, what is the elasticity of supply? 2. What is The equilibrium price? 3. At the equilibrium price (from Question 2), what is the Consumer Surplus equal to? 4. Suppose the government imposes a tax of of $8 per unit sold of the good. How much of the tax does the consumer pay (per unit)?

Consider a perfectly competitive market with demand and supply Qd = 1550 – 3P and Qs...

Consider a perfectly competitive market with demand and supply Qd = 1550 – 3P and Qs = -50+5P The firm’s costs are described by the equations TC = 2500 – 5q +q2 and MC = -5 + 2q a. Find the equilibrium price and quantity in the market. b. Find the profit maximizing quantity for the firm. c. Find the firm’s profit. d. How many identical firms are in this market in the short run? Now consider the long-run where...

Demand: QD = 100 - 2p Supply: QS = 3p If government imposes a 10% ad...

Demand: QD = 100 - 2p Supply: QS = 3p If government imposes a 10% ad valorem tax to be collected from sellers, what is the price consumers will pay? How much tax revenue is collected?

Market Regulation Using the supply and demand functions qD = 12 - 3p qS = -3...

Market Regulation Using the supply and demand functions qD = 12 - 3p qS = -3 + 2p suppose a price ceiling of p = 2 were implemented. a) How much is supplied to the market and how much is demanded? b) What is the excess demand? c) Calculate the consumer surplus, producer surplus, and welfare level without the price ceiling. d) Calculate the consumer surplus, producer surplus, welfare level, and dead weight loss with this price ceiling. e) What...

A supply curve is given by QS = 4 + 3P. Draw the supply curve. You...

A supply curve is given by QS = 4 + 3P. Draw the supply curve. You don't have to draw to scale. Clearly show what happens on this supply curve when the price falls from $18 to $15. Label all appropriate points, as well as numerical values for prices and quantities. Include arrows to clarify.

Demand Equation: QD = 250 − 5P Supply Equation: QS = 10 + 3P 1. When...

Demand Equation: QD = 250 − 5P Supply Equation: QS = 10 + 3P 1. When P = 5, the elasticity of supply is A. 3 B. 0.6 C. 1 D. 30 E. 15 2. Suppose the government imposes a tax of of $8 per unit sold of the good. How much of the tax does the consumer pay (per unit)? A. $8 B. $3 C. $5 D. $6 E. $4

The supply and demand for squash are given by QD = 200,000 – 50,000P and QS...

The supply and demand for squash are given by QD = 200,000 – 50,000P and QS = 90,000P – 80,000, where P is price per pound and Q measures pounds of squash. a. What is the level of consumer surplus at the equilibrium price? b. What is the level of producer surplus at the equilibrium price?

Consider the following demand and supply equations for sugar: Qd = 1,000 -1,000P Qs = 800...

Consider the following demand and supply equations for sugar: Qd = 1,000 -1,000P Qs = 800 + 1,000P where P is the price of sugar per pound and Q is thousands of pounds of sugar. a. What are the equilibrium price and quantity for sugar? At the same equilibrium price, compute the consumer surplus. b. Suppose that the government wishes to subsidize sugar production by placing a floor on sugar prices of $0.20 per pound. How much will the government...

Subjects