Question
In: Economics
2. The inverse demand curve for wheat is p = 10 – 0.10Q and the inverse...
2. The inverse demand curve for wheat is p = 10 – 0.10Q and the inverse supply curve is p = 0.40Q, where p = dollars per bushel and Q is billions of bushels of wheat. Wheat is bought and sold in a perfectly competitive market.
a. Provide a graph of the market for wheat and calculate and show the equilibrium price and quantity (in billions of bushels) in the market.
b. If the government provides a price support of $9 per bushel and buys up the excess wheat from farmers, show the effects of the price support on your graph and calculate the new quantity demanded and supplied.
c. Calculate and explain the effects of the price support on consumer surplus, producer surplus, government expenditures and welfare (deadweight loss) as a result of the price support.
please provide clear graph, math calculations and concise explanations as well. thank you so much
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Suppose that the demand curve for wheat is D ( p ) = 120 − 10...
Suppose that the demand curve for wheat is
D
(
p
) = 120
−
10
p
, and the supply curve is
S
(
p
) = 10
p
. The government imposes a price floor of $8 per unit.
1. Draw a clearly marked graph to illustrate the demand, supply,
competitive equilibrium
point (without government intervention), and the price
floor.
2. Compute the equilibrium price and quantity after the price
floor and interpret the results.
3. Explain who...
2. The inverse demand curve of a monopolist is given by: P = 200 −...
2.
The inverse demand curve of a monopolist is given by:
P = 200 − Q
and the marginal cost is constant at $10, how does charging the
monopoly a specific tax of τ=$12 per unit affect the monopoly
optimum and the welfare of consumers, the monopoly, and society
(where society's welfare includes the tax revenue)?
Calculate the following:
equilibrium price and quantity before the tax
equilibrium price and quantity after the tax
the change in consumer surplus
the...
Suppose the inverse demand curve for the monopoly firm Acme Inc. is P = 10 –...
Suppose the inverse demand curve for the monopoly firm Acme Inc.
is P = 10 – 0.1Q, and that Acme’s total cost is C(Q) = 100 +
2Q.
a. (8) Find the monopoly’s price, output, and profit.
b. (6) Carefully graph the curves necessary to illustrate the
firm’s price and output decision, labeling both curves and axes.
Show the deadweight loss.
c. (8) Suppose Acme realizes that its market demand represents
the demand of 10 identical consumers, each with an...
Consider an oligopoly with 2 firms. The inverse demand curve is given by P = 100...
Consider an oligopoly with 2 firms. The inverse demand curve is
given by P = 100 – Q1 – Q2. Firm 1’s total
cost function is TC1 = 30Q1. Firm 2’s total
cost function is TC2 = 20Q2. Assume now that
the firms compete by choosing their prices simultaneously, so it is
a Bertrand Oligopoly model. Assume that firms choose prices in 0.01
in intervals. (i.e. A firm can choose to charge $10.00 or $10.01,
but not $10.005).
a) Consider...
The domestic demand for salmon in the U.S. has an inverse demand curve of p =...
The domestic demand for salmon in the
U.S. has an inverse demand curve of p = 150 -3Q. The domestic
supply of salmon has an inverse supply curve of p = .050Q. The
price is $ per pound of salmon and Q is in millions of pounds of
salmon. Assume that the market for salmon is perfectly competitive
in a global marketplace.
a.
Provide a graph of the domestic supply and demand for salmon and
then calculate and show the...
The domestic demand for salmon in the U.S. has an inverse demand curve of p =...
The domestic demand for salmon in the U.S. has an inverse demand
curve of p = 150 -3Q. The domestic supply of salmon has an inverse
supply curve of p = .50Q. The price is $ per pound of salmon and Q
is in millions of pounds of salmon. Assume that the market for
salmon is perfectly competitive in a global marketplace.
a. Provide a
graph of the domestic supply and demand for salmon and then
calculate and show the...
A perfectly competitive market exists for wheat. The inverse demand is P = 100-Q where P...
A perfectly competitive market exists for wheat. The inverse
demand is P = 100-Q
where P is the price of wheat and Q is the total quantity of wheat.
The private total cost for
the unregulated market to produce a quantity of Q is 50+80Q
+0.5Q^2. The production of
wheat creates some pollution where the total externality cost is EC
=Q^2.
Task 1: Solve for the free market competitive equilibrium of
wheat.
Task 2: Solve for the socially optimal level...
A perfectly competitive market exists for wheat. The inverse demand is P = 100?Q where P...
A perfectly competitive market exists for wheat. The inverse
demand is P = 100?Q where P is the price of wheat and Q is the
total quantity of wheat. The private total cost for the unregulated
market to produce a quantity of Q is 50+80Q +0.5Q 2 . The
production of wheat creates some pollution where the total
externality cost is EC = Q 2 .
Task 1: Solve for the free market competitive equilibrium of
wheat.
Task 2: Solve...
A perfectly competitive market exists for wheat. The inverse demand is P = 200 − Q...
A perfectly competitive market exists for wheat. The inverse
demand is P = 200 − Q where P is the price of wheat and Q is the
total quantity of wheat. The private total cost for the unregulated
market is C = 50 + 80Q + 0.5Q2 . The production of wheat creates an
externality where the total external cost is E = 0.5Q2 .
(a) Solve for the unregulated competitive equilibrium of wheat
and the socially optimal level of...
1. The inverse demand curve for sprokets is P = 4,000 - 2(q1 + q2), where...
1.
The inverse demand curve for sprokets is P = 4,000 -
2(q1 + q2), where the market output Q is the
sum of each firm's output of sprokets, q1 +
q2 and P is the market price. Spokets can be produced at
a constant MC = ATC = 1,000 and all sprokets produced are
identical.
Suppose there is a duopoly in the production of sprokets and the
firms engage in Stackelberg competition. Firm 1 is the Stackelberg
leader. What...
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