Question

Consider a market with a perfectly
elastic demand curve at * p*∗ =
1

Answer #1

Consider a market with a perfectly elastic demand curve at p∗ =
1,763 and a perfectly inelastic supply curve at q∗ = 452. What is
the Consumer Surplus? What is the Producer Surplus? (15%)

Consider a market with a perfectly vertical demand curve, and a
perfectly horizontal supply curve. Calculate the consumer surplus,
and the producer surplus, in this market.

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...

The demand curve of a perfectly competitive product is
described by the equation:
P = $1000 – Q where Q =
thousands
The supply curve is given by
P = $100 + 2Q where Q =
thousands
Graph the demand and supply curves; use a grid size of 100.
Calculate the equilibrium price and quantity (carefully state the
units). Find the consumer surplus CS, the producer surplus
PS, and the deadweight loss DWL, carefully stating the 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...

Consider a perfectly competitive market with demand Q=1,000-4P.
The marginal cost for each firm in the market is constant at
MC=4.
Determine the competitive equilibrium price and quantity.
.
Graph demand, supply, and the equilibrium found in part A).
Determine consumer surplus, producer surplus, and total
surplus.
Is consumer surplus or producer surplus equal to zero? Why or
why not?
Is this question representative of a long or short-run
perfectly competitive market? How do you know?

2. Consider a perfectly competitive market with market supply
Qs=-2+P and market demand Qd = 30-P. What is
consumer surplus in this market?

Suppose a perfectly competitive market has the following inverse
supply and demand curves: Supply: P= 5+2Q Demand: P = 50-Q.
1) Solve for the perfectly competitive Pe and Qe, and calculate
consumer+producer surplus at Pe, Qe.

A market has a demand curve given by P = 800 – 10Q where P =
the price per unit and Q = the number of units. The supply curve is
given by P =100 + 10Q.(10 points) Graph the demand and supply curves and calculate
the equilibrium price and quantity in this market.(5 points) Calculate the consumer surplus at equilibrium.(5 points) Calculate the producer surplus at equilibrium.(5
points)(5 points) Calculate the total surplus at equilibrium

In a perfectly competitive market, the supply function is P= 1 +
2Q, and the demand function is P = 25 - Q. Hence, in this market,
consumer surplus is _____ and producer surplus is _____. If this
market was to become the monopoly of a single firm with a marginal
cost of production equal to 11, then the welfare loss would be
____.
a) 30; 60; 3
b) 32; 64; 1.5
c) 32; 64; 3
d) 62; 34; 6

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