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

Expert Solution

Rahul Sunny answered 1 year ago
Next > < Previous

Related 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...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT