Question

Suppose the market demand is given by Q = 30 - 2P , and the market
supply is given by Q = - 15 + 3P a)What is the value of Consumer
Surplus when the market is in equilibrium? CS (euilibrium)=

b) Now suppose a Price Floor is set at $11. Calculate the
Consumer Surplus after the Price Floor is imposed. CS (Price
Floor)=

Answer #1

a) Suppose the market is defined by
Demand: Q = 138 – 2P
Supply: Q = 5 + 4P
At a price of P = 38, what is the size of the surplus that will
exist in the market?
b) Suppose the market is defined by
Demand: Q = 159 – 3P
Supply: Q = 5 + 2P
At a price of P = 15, what is the size of the shortage that will
exist in the market?
c)
A...

here are the demand and supply curves for a competetive market
Q=70 -P and Q= -20+2P
i. Calculate the equilibrium in the market.
ii. calculate the consumer supply, producer supply, and total
surplus in this competetive free market.
(For parts iii and iv) Now suppose the government intervenes
and wants to impose a price ceiling in this market.
iii. The government hires you to give advice. What do you
recommend the government set the price ceiling to be for it...

Suppose the market demand for a commodity is given by the
download sloping linear demand function:
P(Q) = 3000 - 6Q
where P is a price and Q is quantity. Furthermore, suppose the
market supply curve is given by the equation:
P(Q) = 4Q
a) Calculate the equilibrium price, quantity, consumer surplus
and producer surplus.
b) Given the equilibrium price calculated above (say's P*),
suppose the government imposes a price floor given by P' > P*.
Pick any such P'...

1 Demand and Supply - Market Equilibrium
Suppose the demand and supply of meals in the Free Spech Cafe in
Berkeley is given by Q^D =50−2p and Q^S =2p−10.
1. Calculate the market equilibrium, i.e. price and the number
of lunches consumed.
2. Draw this scenario in a graph clearly labelled.
3. What is the consumer surplus?

Consider the market for butter in
Saudi Arabia. The demand and supply relations are given as
follows:
Demand:
QD = 12 - 2P
Supply:
Qs = 3P - 3.
P is the price of butter.
Calculate:
Equilibrium price _____________
2. Equilibrium quantity _____________
Consumer surplus
___________
4. Producer surplus ___________
Draw the demand and supply graphs. Show the equilibrium price
and quantity, consumer surplus and producer surplus in the graph
below. Graphs must be on scale.
Suppose government imposes...

Consider the national market for electric school buses with the
demand given by Qd=600-2P and supply given by Qs=3P-150. (Note:
the price is in thousands of US$ and quantity is in
thousands of buses).
(10pts) Calculate the Total Surplus at the equilibrium point
and provide a succinct argument as to why the equilibrium
represents an efficient allocation of resources in this
market.
(10pts) Consider now that the price of electric school buses
increases by $60 (thousands) above the equilibrium
price...

Suppose the market for corn is given by the following equations
for supply and demand:
QS = 2p − 2
QD = 13 − p
where Q is the quantity in millions of bushels per year and p is
the price.
Calculate the equilibrium price and quantity.
Sketch the supply and demand curves on a graph indicating the
equilibrium quantity and price.
Calculate the price-elasticity of demand and supply at the
equilibrium price/quantity.
The government judges the market...

The inverse Demand is given by: P=30-0.25Q and the inverse
supply is given by: P=0.5Q-30. If a Price Floor of $12 is imposed,
then Consumer Surplus and DWL
are: (Hint: it helps to draw a graph for this question)
Select one:
a. CS=1728; DWL = 12
b. CS=648; DWL = 12
c. CS=1600; DWL = 6
d. CS=648; DWL = 24
e. None of the above

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 the market for grass seed is expressed as:
Demand: Q D = 100 - 2p
Supply: Q S = 3p
Price elasticity of supply is constant at 1. If the supply curve is
changed to Q = 8p, price elasticity of supply is still constant at
one. Yet with the new supply curve, consumers pay a larger share of
a specific tax. Why?

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