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?

1)

Market equilibrium is attained where Demand = Supply:

Price = 40

Quantity = 30

2)

Total surplus at equilibrium = Area bounded by Demand and supply curves with the Y axis

Total surplus at equilibrium = (100 - 10) x 30/2 = 1350

3) price ceiling = 50 (maximum price)

This would be non-binding as equilibrium price < price ceiling

Total surplus remains the same = 1350

4)

price ceiling = 20 (maximum price)

This would be binding as equilibrium price > price ceiling

Consumer surplus = green shaded region in the graph above

CS = (100 - 80) x 10/2 = 100

5)

price ceiling = 10 (maximum price)

This would be binding as equilibrium price > price ceiling

Dead weight loss = entire total surplus calculated in part 2) , this is because no supplier would be willing to supply at a price = 10.

Quantity supplied = 0

DWL = 1350

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 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 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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