Question

The estimated market demand function for electric vehicles (E) is Q = 182 - 6PE +...

The estimated market demand function for electric vehicles (E) is

Q = 182 - 6PE + 3PG + 5Y,

and the supply function is

Q = 122.+ 4PE

  1. Solve for equilibrium price and quantity in the market for electric vehicles. The price of electric vehicles is PE, the price of gasoline-powered cars is PG, and household income is Y.

Currently the price of gasoline-powered cars, PG, is 40 (thousand dollars) and household income, Y, is 48 (thousand dollars).

  1. At the market equilibrium, what is consumer surplus?
  2. Suppose that the price of gasoline-powered cars increases from 40 to 46 (thousand dollars). What is consumer surplus in the market for electric vehicles at the new equilibrium?
  3. In a diagram, please draw the original (inverse) demand function and the supply function. Note the original equilibrium. Then draw the new (inverse) demand function after the increase in the price of gasoline-powered cars. Note the new equilibrium. Shade in the consumer surplus for both.
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The market for bauxite is perfectly competitive. Market inverse demand is given by PD(Q)=500-Q, where price...
The market for bauxite is perfectly competitive. Market inverse demand is given by PD(Q)=500-Q, where price is measured in dollars per ton and Q is measured in million of tons. Market inverse supply of bauxite is PS(Q)=100+Q, where price is measured in dollars per ton and Q is measured in millions of tons. -Calculate the equilibrium price and quantity in this market. Represent your solution using a graph. -Calculate producer and consumer surplus. Identify consumer and producer surplus on a...
Suppose that the market demand curve for residential water is: Q D = 10 – 2.25...
Suppose that the market demand curve for residential water is: Q D = 10 – 2.25 P and the market supply curve is: Q S = –10 + 2.75 P where the quantity is measured in millions of gallons per month and the price is in dollars per thousand gallons. a. Calculate the equilibrium price and quantity. b. Calculate the consumer surplus at the equilibrium price
A firms demand function is Q= 10 - P/6; its supply function is Q= P/3 - 2.
A firms demand function is Q= 10 - P/6; its supply function is Q= P/3 - 2.a) what is the equilibrium quantity?b) What is the equilibrium price?c.) Draw a graph showing the inverse DEMAND function, inverse SUPPLY function, equilibrium price, and equilibrium quantity.Label the axes, the curves, and equilibrium. Also, show the values of the intercepts of the inverse demand and supply functions.
A.1. a. Suppose the demand function P = 10 - Q, and the supply function is:...
A.1. a. Suppose the demand function P = 10 - Q, and the supply function is: P = Q, where P is price and Q is quantity. Calculate the equilibrium price and quantity. b. Suppose government imposes per unit tax of $2 on consumers. The new demand function becomes: P = 8 – Q, while the supply function remains: P = Q. Calculate the new equilibrium price and quantity. c. Based on (b), calculate the consumer surplus, producer surplus, tax...
The supply function in the market for LA Lakers tickets is Q = P − 10...
The supply function in the market for LA Lakers tickets is Q = P − 10 and the inverse demand function is P = 40 − 2Q. Ticket sellers are having a hard time selling LA Lakers tickets so the California government steps in to subsidize ticket sales by 6 dollars per ticket. What is the resulting consumer surplus?
5) The demand for the Tesla electric automobile is P = 200,000 – 2.1 Q, where...
5) The demand for the Tesla electric automobile is P = 200,000 – 2.1 Q, where P is in $/car and Q is the number of cars sold per year. The supply of the Tesla in question 3 is P = 20,000 + Q, P is in $/car and Q is the number of cars produced per year. What is Total Surplus in the Tesla market, to the nearest million dollars? 6) The demand for the Tesla electric automobile is...
Suppose the market demand is given by Q = 30 - 2P , and the market...
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)=
1. Draw the market for electric vehicles in initial equilibrium. Be sure to label the axes...
1. Draw the market for electric vehicles in initial equilibrium. Be sure to label the axes and the curves/lines. Clearly demonstrate the initial equilibrium price and quantity. 2. Suppose the cost of lithium-ion batteries, an input into the production of electric vehicles, has dropped more steeply than expected. Use the 4-step process to demonstrate the effect of this change in the market for electric vehicles. Explain why you have drawn the change you have. 3. Has there been a change...
Consider a perfectly competitive market with Market demand function: ?? = 1000 − 2? Market supply...
Consider a perfectly competitive market with Market demand function: ?? = 1000 − 2? Market supply function: ?? = 2? a. Suppose there is no sales tax. What is the equilibrium price and equilibrium quantity? What is the consumer surplus and producer surplus? b. Now suppose the government imposes a sales tax of $50 per unit on consumers. What is the new equilibrium price and equilibrium quantity? What is the new consumer surplus and producer surplus? What is the tax...
4. Let's say that the market demand curve for gasoline is Q = 100 - P...
4. Let's say that the market demand curve for gasoline is Q = 100 - P (however, P is price, Q is quantity), and that the private cost curve of the gasoline supply industry is MC = 10 + Q. And suppose that the marginal cost curve due to the marginal damage of pollution from gasoline supply is MEC = Q. (a) First, calculate and graph the market balance of the price and sales of this gasoline market when there...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT