Question

1. [Market Equilibrium]

Following table shows information about the demand for apples in the wholesale market.

Price, P ($/lb) Quantity Qd (lbs)

10/0

8/4

6/8

4/12

2/16

(a) Draw a graph with Price (P) on the vertical axis and Quantity demanded (Qd) on the horizontal axis?

(b) Write the equation for this inverse demand function.

(c) What is the quantity demanded when P = $3/lb? Following table shows information about the supply of 20 lbs box of apples in the wholesale market.

Price, P ($/lb) Quantity Qs (lbs)

0/ 0

2/ 4

4/ 8

6/ 12

8/ 16

(i) Draw a graph with Price (P) on the vertical axis and Quantity supplied (Qs) on the horizontal axis?

(ii) Write the equation for this inverse supply function.

(iii) What is the quantity supplied when P = $9/lb? Next we determine the market equilibrium.

(I) Find out the equilibrium price and quantity.

(II) What are the consumers’ surplus, producers’ surplus and the total surplus?

(III) What is the shortage / surplus if the Government imposes a price floor of $7/lb in this market?

(IV) What is the shortage / surplus if the Government imposes a price ceiling of $4/lb in this market?

(V) What is the shortage / surplus if the Government imposes a price floor of $4.5/lb in this market?

Answer #1

Following table shows information about the demand for apples
in the wholesale mar-
ket.
Price, P ($/lb) Quantity Qd (lbs)
10. 0
8. 4
6 8
4. 12
2 16
(a) Draw a graph with Price (P) on the vertical axis and
Quantity demanded (Qd) on
the horizontal axis?
(b) Write the equation for this inverse demand function.
(c) What is the quantity demanded when P = $3/lb?
Following table shows information about the supply of 20 lbs
box of...

A market is described by the following supply and demand
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QS = 2P
QD = 400 - 3P
Solve for the equilibrium price and quantity.
If the government imposes a price ceiling of $70, does a
shortage or surplus (or neither) develop? What are the price,
quantity supplied, quantity demanded, and size of the shortage or
surplus?
If the government imposes a price floor of $70, does a shortage
or surplus (or neither) develop? What are the price, quantity...

A market is described by the following supply and demand
curves:
QSQS
= =
3P3P
QDQD
= =
400−P400−P
The equilibrium price is______
and the equilibrium quantity is_______
.
Suppose the government imposes a price ceiling of $80. This
price ceiling is (binding or not binding) , and
the market price will be
. The quantity supplied will be______
, and the quantity demanded will be_____
. Therefore, a price ceiling of $80 will result in (a
shortage, neither a shortage nor...

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Qs=2p
Qd=300-p
A. Solve for the equilibrium price and equilibrium quantity.
Sketch this market.
B. Solve for the consumer surplus and producer surplus in this
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C. If the government imposes a price ceiling of $90, does a
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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
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Quantity demanded:
Quantity supplied:
Surplus:
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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...

ndogenous, exogenous variables; Slope of a line - Equilibrium in
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demanded and quantity supplied are res given respectively: QS = -8
+ 4P and Qd = 42–6P. It follows that the equilibrium price ( Pe) =
_________. In the context of the supply and demand model, the two
variables (Qd and Qs) are referred to as ____________ variables
(endogenous; exogenous). Explain your answer....

The table below shows the market for bottled
water
Price per Bottle
Quantity Demanded
Quantity Supplied
$0.50
10
7
0.75
8
8
1.00
6
9
1.25
4
10
1.50
2
11
Suppose the government imposes a price floor of $1.00 per bottle
of water. The price floor will result in
Group of answer choices
A.A surplus of two bottles
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C.A shortage of two bottles
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Suppose the corn market has the following equations: QD = 3000 -
400P QS = 900 + 300P Where QD and QS are quantity demanded and
quantity supplied measured in bushels, and P = price per
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Determine consumer surplus at the equilibrium price and
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Assume that the government has imposed a price floor at $3.50
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equilibrium price and quantity? Draw out the supply...

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