Question

A market is described by the following supply and demand curves:

Q^{S} = 2P

Q^{D} = 400 - 3P

Solve for the equilibrium price and quantity.

If the government imposes a price ceiling of $70, does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity demanded, and size of the shortage or surplus?

If the government imposes a price floor of $70, does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity demanded, and size of the shortage or surplus?

Instead of a price control, the government levies a tax on producers of $20. As a result, the new supply curve is:

Q^{S} = 2(P-20)

Does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity demanded, and size of the shortage or surplus?

Answer #1

Equilibrium at point where Qs=Qd

2P = 400-3P

5P = 400

**P = 80**

**Q = 2*80 = 160**

**Price Cieling of P = 70 will
be binding as it is less than the equilibrium price.**

**Qs at P = 70, = 2*70 =
160**

**Qd at P = 70 = 400-3*70 =
190**

**Shortage = 190 - 160 = 30
units (Qd>Qs, Shortage = Qd-Qs)**

Price floor of P= 70 will not be binding as the equilibrium price is already above ther price floor set.

New equilibrium after tax

2P-40 = 400 - 3P

5P = 440

P = 88

Q = 400-3*88 = 136

At P = 88, Qd = 136 and Qs = 2*88 = 176

Surplus as Qs>Qd = 176-136 = 40 units

A market is described by the following supply and demand
curves:
QSQS
= =
3P3P
QDQD
= =
400−P400−P
The equilibrium price is______
and the equilibrium quantity is_______
.
Suppose the government imposes a price ceiling of $80. This
price ceiling is (binding or not binding) , and
the market price will be
. The quantity supplied will be______
, and the quantity demanded will be_____
. Therefore, a price ceiling of $80 will result in (a
shortage, neither a shortage nor...

Suppose that the market demand and supply for milk is given
by
Qd =120−6P
and
Qs = 12P − 60
a. Find the market equilibrium quantity, and the equilibrium price.
(5 points)
b. Determine the quantity demanded, the quantity supplied, and
the magnitude of the surplus (or shortage) if a price floor of $11
is imposed in this market. (5 points)
c. Determine the quantity demanded, the quantity supplied, and
the magnitude of the surplus (or shortage) if a price...

Suppose demand and supply are given by Qd =
60 - P and Qs = 1.0P
- 20.
a. What are the equilibrium quantity and price in this
market?
Equilibrium quantity:
Equilibrium price: $
b. Determine the quantity demanded, the quantity supplied, and the
magnitude of the surplus if a price floor of $52 is imposed in this
market.
Quantity demanded:
Quantity supplied:
Surplus:
c. Determine the quantity demanded, the quantity supplied, and the
magnitude of the shortage if a price...

Show the work:
Suppose the market demand and supply curves are given by
Qd = 20 – 3P and Qs = P, respectively.
Suppose the government imposes a price ceiling of $2:
Calculate the magnitude of the resulting shortage.
Calculate the resulting full economic price. That is, the
maximum price consumers are willing to pay to avoid waiting in
line.

1. [Market Equilibrium]
Following table shows information about the demand for apples in
the wholesale market.
Price, P ($/lb) Quantity Qd (lbs)
10/0
8/4
6/8
4/12
2/16
(a) Draw a graph with Price (P) on the vertical axis and
Quantity demanded (Qd) on the horizontal axis?
(b) Write the equation for this inverse demand function.
(c) What is the quantity demanded when P = $3/lb? Following
table shows information about the supply of 20 lbs box of apples in
the...

Subject: Managerial Economics
Given the demand and supply equations for wheat Qd =
40 - 3P and Q5 = 5 + 2P. Quantity is measured in bushels
and price is in dollars per bushel. Answer the following
questions:
4.1 What are equilibrium price and quantity?
4.2 Determine quantity demanded, quantity supplied and the
dollar value of the surplus given a price floor of $9.
4.3 Determine quantity demanded, quantity supplied and the
dollar value of the shortage given that there...

Suppose that a market is described by the following supply and
demand equations:
QS = 2P
QD = 400 - 3P
Suppose that a tax of T is placed on buyers, so the new demand
equation is
QD = 400 – 3(P+T)
Solve for the new equilibrium. What happens to the price
received by sellers, the price paid by buyers, and the quantity
sold?
Tax revenue is T x Q. Use your answer from part (b) to solve for
tax...

The demand and supply for a good are respectively QD = 16 – 2P +
2I and QS = 2P – 4 with QD denoting the quantity demanded, QS the
quantity supplied, and P the price for the good. Suppose the
consumers’ income is I = 2. 6) Determine the price-elasticity of
demand if P = 2. 7) Determine the income-elasticity of demand if P
= 2. 8) Determine the price-elasticity of supply if P = 4. 9)
Determine consumers’...

the following demand and supply curves:
QD = 80,000 - 2,000P and QS = -25,000 + 5,000P
3.
What is the consumer surplus in this example of supply and
demand?
What is the producer surplus in this example?
How much are the variable costs to the firm in this example?
4.
Suppose the government were to impose a price ceiling of $10 on
the sale of
each unit sold in this market.
Is there a shortage or a surplus? By...

Following table shows information about the demand for apples
in the wholesale mar-
ket.
Price, P ($/lb) Quantity Qd (lbs)
10. 0
8. 4
6 8
4. 12
2 16
(a) Draw a graph with Price (P) on the vertical axis and
Quantity demanded (Qd) on
the horizontal axis?
(b) Write the equation for this inverse demand function.
(c) What is the quantity demanded when P = $3/lb?
Following table shows information about the supply of 20 lbs
box of...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 9 minutes ago

asked 10 minutes ago

asked 18 minutes ago

asked 18 minutes ago

asked 27 minutes ago

asked 29 minutes ago

asked 30 minutes ago

asked 38 minutes ago

asked 53 minutes ago

asked 57 minutes ago

asked 58 minutes ago

asked 58 minutes ago