Question

A person’s demand for gizmos is given by the following equation: Q = 6 – 0.5P + 0.0002I, where Q is the quantity demanded at price P when the person’s income is I. Assume initially that the person’s income is $60,000

5. If price rises to $12, how much consumer surplus is lost? [State your answer as an integer, i.e. don't use a decimal point.] Loss in consumer surplus = $

6. If the person’s income were $80,000, what would the loss in consumer surplus from a price rise from $10 to $12? [State your answer as an integer.] Loss in consumer surplus = $

Answer #1

A person’s demand for gizmos is given by the following equation:
Q = 6 – 0.5P + 0.0002I, where Q is the quantity demanded at price P
when the person’s income is I. Assume initially that the person’s
income is $60,000
5. If price rises to $12, how much consumer surplus is lost?
[State your answer as an integer, i.e. don't use a decimal point.]
Loss in consumer surplus = $
6. If the person’s income were $80,000, what would...

Suppose that the demand equation: P = 6 – Q and supply equation:
P = Q.
a. Calculate the price elasticity of demand at
equilibrium.
b. Calculate the equilibrium price and quantity, and consumer
surplus and producer surplus.
c. Suppose government imposes a unit tax of $1 on producers. Derive
the new supply curve and also calculate the new equilibrium price
and quantity.
d. Calculate tax revenue and the deadweight loss of this tax.

Assume that the demand
curve D(p) given below is the market demand for apples:
Q=D(p)=320−12pQ=D(p)=320-12p, p
> 0
Let the market supply
of apples be given by:
Q=S(p)=60+15pQ=S(p)=60+15p,
p > 0
where p is the price
(in dollars) and Q is the quantity. The functions D(p) and S(p)
give the number of bushels demanded and supplied.
What is the
consumer surplus at the equilibrium price and
quantity?
Round the equilibrium
price to the nearest cent, use that rounded price to...

Suppose a firm has an estimated general demand function for good
X is given by:
Q = 200,000 -500P + 1.5M – 240Pr
Where P = price of good X, M is the average income of the
consumers who buy good X, and Pr is the price of a related good.
Suppose that the values of P, M and Pr are given by $200, $80,000,
and $100 respectively.
An increase in the price of good X by 5% will
Decrease...

2. A market for agriculture produce can be described by two
linear equations. Demand is given by P = 170− (1/6)Q, and supply is
given by P = 50+(1/3)Q, where Q is the quantity and P is the
price.
a) Graph the functions and find the equilibrium price and
quantity.
b) Now the government implements a supporting price of $140.
Calculate the surplus (excess supply), the consumer surplus and
producer surplus.
c) Suppose the government instead chose to maintain a...

6. Suppose the demand equation can be represented as QD = 1200 –
10p and the Supply equation by Qs= 10p.
a. Solve for the equilibrium price and quantity.
b. Say an excise tax of $5 was placed on the buyers. Solve for
the price buyers pay, price that sellers receive, and the quantity
sold in the market after the tax. Show your work and results
graphically.
c. Find the deadweight loss, consumer surplus, producer surplus,
consumer surplus, and tax...

The demand function for a product is given by
p =
3000e−q/4.
(a)
At what price per unit will the quantity demanded equal 12
units? (Round your answer to two decimal places.)
$
(b)
If the price is $54.90 per unit, how many units will be
demanded, to the nearest unit?
units

Consider a perfectly competitive market where the market demand
curve is given by Q = 76−8P and the market supply curve is given by
Q=−8+4P. In the situations (e), determine the following items
(i-viii)
(e) A market with price floor F = 6.
i) The quantity sold in the market.
ii) The price that consumers pay (before all
taxes/subsidies).
iii) The price that producers receive (after all
taxes/subsidies).
iv) The range of possible consumer surplus values.
v) The range of...

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...

The consumer demand equation for tissues is given by q = (96 −
p)2, where p is the price per case of tissues and q is the demand
in weekly sales.
(a) Determine the price elasticity of demand E when the price is
set at $31. (Round your answer to three decimal places.) E =
Interpret your answer. The demand is going by % per 1% increase in
price at that price level.
(b) At what price should tissues be...

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