Suppose the demand and supply curves for units of university credits are given by the following...

Suppose the demand and supply curves for units of university credits are given by the following equations: Q D = 5400 − 2P Q S = 3P − 400 where QD is the quantity of credits demanded, QS is the quantity supplied, and P is the price charged for each unit in dollars. (a) (3 points) What is the free-market equilibrium Price and Quantity. (b) (3 points) Suppose that the government wants to make education more accessible and therefore passes a regulation that says no university can charge more than $800 per credit. What is the new equilibrium Price and Quantity? (c) (4 points) Calculate the shortage or surplus generated by this government policy. Show it on graph. Include your answers from part (a) and (b) on the graph.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Suppose the supply and demand curves for natural gas are given by the following equations: QD...

Suppose the supply and demand curves for natural gas are given by the following equations: QD =34−1.8P QS =18+0.7P, where Q denotes the quantity of natural gas in thousands of cubic feet and P denotes the price of gas per thousand cubic feet. 4a) Find the equilibrium price and quantity of natural gas. Illustrate your answer using a supply and demand diagram. 4b) Now suppose that the government regulated the market for natural gas and set the regulated price of...

suppose the demand and supply curves for sparkling cider are given by:QD = 110 – 20PQS...

suppose the demand and supply curves for sparkling cider are given by:QD = 110 – 20PQS = -32 + 13Pwhere QD is the quantity of sparkling cider demanded (in thousands of bottles), QS is the quantity supplied, and P is the price of sparkling cider (in dollars per bottle). a.Find the equilibrium price and quantity of sparkling cider. Round P to the nearest cent (hundredth) and Q to the nearest whole number. b.If price is set at $4 per bottle,...

Given the following demand and supply curves for a product that is produced in two countries,...

Given the following demand and supply curves for a product that is produced in two countries, one labelled Home and the other Foreign. The Home country imports the product from the Foreign country. The information for the Home country: Quantity demanded is: QD1=20-10p Quantity supplied is: QS1=-5+20P And the following information for the Foreign country: Quantity demanded is: QD2=15-35P Quantity supplied is: QS2=-20+5P 1. The home country imposes a specific import tariff of $13 per unit. Calculate the welfare impact...

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.

The demand and supply curves of physician service is given by the equations -- Demand curve:...

The demand and supply curves of physician service is given by the equations -- Demand curve: Qd= 500 – 3.0 P and Supply curve: Qs = -100 + 1.8 P in absence of insurance. If insurance is introduced with 40% coinsurance, market price and quantity after the introduction of insurance would be Price=$200 and Q=260 Price=$125 and Q=125 Price=$200 and Q=0

You are given the following market supply and demand curves in the Widget industry: QD =...

You are given the following market supply and demand curves in the Widget industry: QD = 250 – 5p QS = 10p – 100 Next, assume that the government has granted a monopoly to ABC Company to produce widgets. Answer the following questions based on this information: (a) What is the marginal cost curve for ABC Company? (b) What is the equation for the marginal revenue curve for ABC Company? (c) Given your answers to parts (a) & (b), what...

Given the following information graphically illustrate the demand and supply curves and solve for the consumer...

Given the following information graphically illustrate the demand and supply curves and solve for the consumer and producer surplus: a. Q(d)=200-5P Q(s)=50+5P b. Q(d)=1000-20P Q(s)=200+5P c. P=400-0.5Q(d) P=100+0.5Q(s) d. P=2000-2Q(d) P=200+3Q(s)

1. The demand and supply curves for T-shirts in Platteville, WI, are given by the following...

1. The demand and supply curves for T-shirts in Platteville, WI, are given by the following equations: Q1 = (P / 4) Q2 = [(30 – P) / 2] Where P is measured in dollars and Q is the number of T-shirts sold per year. a. Find the equilibrium price and quantity algebraically. b. Construction and graph the market schedule with at least 3 different price levels including Pe , $30 and $10. Please label you graph. c. If a...

Supply-Demand analysis Let the inverse market demand and supply curves for an arbitrary good be given...

Supply-Demand analysis Let the inverse market demand and supply curves for an arbitrary good be given by ?(??) = ? − ??? and ?(?? ) = ? + ??? , respectively, where ?? (conversely, ?? ) denotes quantity demanded (conversely, quantity supplied) and all lower-case Greek letters denote positive parameters such that ? > ??? > 0 and ? > ? (a) Solve for the market equilibrium price (? ∗ ) and quantity (? ∗ ) and show this solution...

Consider the market for sugary drinks. The demand and supply curves are given by: ?? =...

Consider the market for sugary drinks. The demand and supply curves are given by: ?? = ? −??? ?? = ? +??? (a) Find the equilibrium prices and quantities. (b) Suppose that the government wants to lower consumption of sugary drinks by 50% and has considered setting a minimum price for sugary drinks. Find the minimum price ???? which should be set. (c) Discuss whether a maximum price would achieve the same objective. (d) Now suppose the government is considering...

Subjects