Question

Suppose that the (inverse) demand for Sugar in the US is given
by, **P= 75-2 Qd**

where P = price per bulk bag (in dollars) and Q_{d} =
quantity demanded (in millions of bulk bags).

Suppose the (inverse) supply of sugar is given by, **P= 3
Qs**

where P = price per bulk bag (in dollars) and Q_{s} =
quantity supplied (in millions of bulk bags).

a.) Find the equilibrium price and quantity of sugar exchanged in the US market, find the Producer Surplus, Consumer Surplus, and Total Surplus without trade (10 points).

b.) Now the US imposes a tax on sellers of $10 per bulk bag of sugar. Find the new equilibrium quantity after the tax, price buyers pay, price sellers receive, tax revenue, and DWL. Draw and label your graph for full credit.

Answer #1

Suppose the demand curve for a good is given by QD = 10 - 2P and
the supply curve is given by QS = -2 + P.
a) (4 points) Find the equilibrium price and quantity in the
absence of any government intervention.
b) (6 points) Now suppose the government imposes a tax of t = 3.
Find the new equilibrium price at
which the good is sold in the market and the quantity of the
good sold. What is...

Suppose the demand curve is given by Qd=75-5P and the supply
curve is given by Qs=P-3. SHOW YOUR WORK in the space below (type
it out, line by line), and solve for the equilibrium price, the
equilibrium quantity, the consumer surplus, the producer surplus,
and the total surplus.

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...

The demand for sugar is given by: QD= 420 -0.25P. The supply of
sugar is given by: QS= 4P -1110. The equilibrium quantity without a
tax is 330 units. The government levies a $85 per unit tax on the
suppliers of sugar. Calculate deadweight loss from this tax.

Suppose demand and supply are given by Qd = 60 – P
and Qs = P -20
What are the equilibrium quantity and price in this
market?
Determine the quantity demanded, the quantity suppled, and the
magnitude of the surplus if a price floor of $50 is imposed in this
market.
Determine the quantity demanded, the quantity suppled, and the
magnitude of the shortage if a price celling of $32 is imposed in
this market. Also determine the full economic...

The demand and supply curves for Fuji apples are given by
QD = 50 – 6P and
QS = 4P – 2, where P is price
per bag and Q is in thousands of bags. What are consumer
surplus and producer surplus at the equilibrium price?
Answer Choices:
CS = $29,422; PS = $44,180
CS = $15,006; PS = $7,657
CS = $856,000; PS = $1,126,113
CS = $450; PS = $375

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 can be characterized by the following
equations:
Qd = 6 – 2P
Qs = P
Price is in dollars; quantity is in widgets.
For parts (a) and (b), assume there is no tax. Show your work
for each step below.
Find the equilibrium price and quantity algebraically.
Calculate the following:
consumer surplus
producer surplus
total firm revenue
production costs
For parts (c) and (d), assume a tax of $1.50 per widget sold is
imposed on sellers....

Suppose that the inverse demand for webcams is given by P = 150
– Q and the inverse supply for webcams is given by P = 30 + 2Q.
If the market for webcams faces a quota of 30 units, then what
are the equilibrium price and quantity?
If the market for webcams faces a quota of 30 units and a tax
of $60 per webcam, then what are the equilibrium price and
quantity?
In dollars, what is the tax...

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...

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