Question

In a market with numerous sellers and buyers demand is given by p=240-8q and supply is...

In a market with numerous sellers and buyers demand is given by p=240-8q and supply is p=4+12q.

1. Find the equilibrium price and quantity.

2. Mathematically find the values for consumer and producer surplus.

3. What is the deadweight loss in this market?

4. Suppose instead a monopolist served these same buyers, and the monopolist had marginal cost curve 4+12q. a. Show graphically the consumer surplus that consumers have lost due to monopoly. b. Consumer surplus is lower for two reasons. What are these? Identify regions in your answer to #4(a) that correspond to these reasons

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The market for apples is perfectly competitive, with the market supply curve is given by P...
The market for apples is perfectly competitive, with the market supply curve is given by P = 1/8Q and the market demand curve is given by P = 40 – 1/2Q. a. Find the equilibrium price and quantity, and calculate the resulting consumer surplus and producer surplus. Indicate the consumer surplus and producer surplus on the demand and supply diagram. b. Suppose the government imposes a 10 dollars of sale tax on the consumer. What will the new market price...
A monopoly is facing inverse demand given by P = 40−0.5Q and marginal cost given by...
A monopoly is facing inverse demand given by P = 40−0.5Q and marginal cost given by MC = 7+0.1Q. Illustrate these on the graph and answer the questions below. (a) If the monopolist is unable to price discriminate, what is the profit-maximizing quantity? What is the price? What is consumer surplus? Producer surplus? Deadweight loss? (b) Suppose instead the monopolist is able to perfectly price discriminate. How many units will be sold? What is consumer surplus? Producer surplus? Deadweight loss?
Consider a market for cell phones. The demand and supply are defined by P = 400...
Consider a market for cell phones. The demand and supply are defined by P = 400 -10 q, and P = 100 + 2q Suppose now that the government requires each seller to pay a 60 tax for each cell phone. Compute the change in consumer surplus, change in producer surplus, the tax revenue, and the deadweight loss in the new equilibrium. Suppose now that the government does not tax the seller, but instead the buyer to pay a $60...
Suppose there is a market at its competitive equilibrium. Demand p = 100 - QD Supply...
Suppose there is a market at its competitive equilibrium. Demand p = 100 - QD Supply p = 20 + (QS /3) The government introduces a subsidy of s = $4 per unit of the good sold and bought. (a) Draw the graph for the demand and supply before subsidy. (b) What is the equilibrium price and quantity before the subsidy and after the subsidy? (c) Looking at the prices buyers pay and sellers receive after the subsidy compared to...
Suppose demand and supply conditions in a market are given by P = 12 - 2QD...
Suppose demand and supply conditions in a market are given by P = 12 - 2QD and P = 3 + QS respectively. In equilibrium, a market will usually generate both consumer and producer surplus. Who gets the most surplus in this market? A. Consumers and producers split the surplus equally. B. Consumers get more surplus than producers. C. Producers get more surplus than consumers. D. There is neither consumer nor producer surplus in this market.
4. Assume a demand of Q = 800 – 2P Assume this market is served by...
4. Assume a demand of Q = 800 – 2P Assume this market is served by a monopoly. MC = AC = $20. a. Calculate the consumer surplus. b. Calculate the producer surplus. c. Calculate the deadweight loss.
Market demand for calculators is P = 300 – 3Q and market supply is P =...
Market demand for calculators is P = 300 – 3Q and market supply is P = 20 + 2Q. A) Calculate market equilibrium price and quantity. B) How many calculators will be traded if a $10/unit sales tax is implemented? C) Does it matter if we impose this tax on suppliers or consumers? Why? D) At market equilibrium, is demand more or less elastic than supply? E) Calculate the effects of the tax on consumer surplus, producer surplus, tax revenue,...
Qd = 240 - 5P Qs = P (a) Where Qd is the quantity demanded, Qs...
Qd = 240 - 5P Qs = P (a) Where Qd is the quantity demanded, Qs is the quantity supplied and P is the Price. Find: (1) the Equilibrium Price before the tax (2) the Equilibrium quantity before the tax (3) buyers reservation price (4) sellers reservation price (5) consumer's surplus before tax (6) producer's surplus before tax (b) Suppose that the government decides to impose a tax of $12 per unit on seller's in the market. Determine: (1) Demand...
1. (12 marks) Consider a labour market where labour demand is given by w=240−2LD and labour...
1. Consider a labour market where labour demand is given by w=240−2LD and labour supply is given by w=30+3LS . a. Calculate the competitive market equilibrium quantity of labour and wage. b. Calculate the competitive market consumer surplus and producer surplus c. Calculate the monopoly market equilibrium quantity of labour and wage. d. Calculate the monopoly market consumer surplus and producer surplus. e. Calculate the bilateral monopoly equilibrium quantity of labour. f. Calculate the level of leverage, α , the...
A market has supply and demand curves that follow the following set of equations: Supply →...
A market has supply and demand curves that follow the following set of equations: Supply → P = 4QS + 10 Demand → P = -5QD + 280. For both of these problems pictures are not required but the problems may be much easier if you draw some. a) Find the equilibrium price and quantity in this market and the consumer and producer surplus from the equilibrium price and quantity. (1 point) b) If there is a ceiling price in...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT