Question

3. Market demand for a good is given by QD= 30- 2P and its market supply...

3. Market demand for a good is given by QD= 30- 2P and its market supply is given by QS=P - 6.

(a) Determine the market equilibrium quantity (QM) and price (PM) .

(b) If marginal external benefit is 3 at all levels of consumption (i.e. MEB=3), then what is the socially efficient level of production (Q*)?

-Provides some work to justiy your answers.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer:
a. market equilibrium quantity (QM) = 6
and price (PM) = 12
reason:
Market equilibrium quantity and price are when Qd = Qs
30 - 2P = P - 6; so P = 12; Q = 6

b.  socially efficient level of production (Q*) = 8
reason: Socially efficient output is where MPB + MEB = MC
We need inverse functions for that where we present Price as a function of quantity.
15 - 0.5Q + 3 = 6+ Q so, Q = 8; P = 14


  


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 demand and supply curves for a good are given by QD = 50 – 2P...
The demand and supply curves for a good are given by QD = 50 – 2P and QS = P – 1. Calculate the price elasticity of demand at the equilibrium price. Calculate the price elasticity of supply at the equilibrium price. What would happen to consumer expenditures on the good if firms must pay higher prices for their inputs in production?
1. The market demand and supply was given as follow: Qd = 10 – 2P Qs...
1. The market demand and supply was given as follow: Qd = 10 – 2P Qs = -5 + 3P a) Compute for the Price equilibrium b) Compute for the Quantity equilibrium c) Plot/graph the following equation. 2. Given the equation, find the equilibrium price and quantity of the following market and plot the equation. 13P – Qs = 27 Qd + 4P – 24 = 0
Consider the following market. Demand is given by qd = 150 – 2P, where qd is...
Consider the following market. Demand is given by qd = 150 – 2P, where qd is the quantity demanded and P is the price. Supply is given by qs = P, where qs is the quantity supplied.The government implements a tax of $30 per unit to be paid by consumers. What is the new market equilibrium? What is the economic incidence of the tax (that is, who pays for the tax)? How would your answer change if the government implemented...
1. Consider a demand curve of the form QD = 40 - 2P, where QD is...
1. Consider a demand curve of the form QD = 40 - 2P, where QD is the quantity demanded and P is the price of the good. The supply curve takes the form of QS = -4 + 2P, where QS is the quantity supplied, and P is the price of the good. Be sure to put P on the vertical axis and Q on the horizontal axis. a. What is the equilibrium price and quantity? Draw out the supply...
The demand and supply for a good are respectively QD = 16 – 2P + 2I...
The demand and supply for a good are respectively QD = 16 – 2P + 2I and QS = 2P – 4 with QD denoting the quantity demanded, QS the quantity supplied, and P the price for the good. Suppose the consumers’ income is I = 2. 6) Determine the price-elasticity of demand if P = 2. 7) Determine the income-elasticity of demand if P = 2. 8) Determine the price-elasticity of supply if P = 4. 9) Determine consumers’...
Suppose the demand curve for a good is given by QD = 10 - 2P and...
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...
The market for paper in a particular region has the supply and demand curves: QD =...
The market for paper in a particular region has the supply and demand curves: QD = 160,000 - 2,000P QS = 40,000 + 2,000P, where Q is measured in hundred-pound lots, and P is price per hundred-pound lot. There is currently no attempt to regulate the dumping of effluent into streams and rivers by the paper mills. As a result, dumping is widespread. The marginal external cost associated with the paper production is given by the expression: MEC = 0.0002Q....
The demand and supply functions of a given competitive market are provided as follows: Qd =...
The demand and supply functions of a given competitive market are provided as follows: Qd = 100 – 2P Qs = 70 + 3P You are required to; (a) Find the equilibrium price and quantity sold. 7 marks (b) Assuming that the government of Ghana has imposed GH¢2.00 per unit tax on the good in the market. What will be the new equilibrium price and quantity in the market? 11 marks
Assume that the demand function for a particular good is Qd=90-2P and the supply function is...
Assume that the demand function for a particular good is Qd=90-2P and the supply function is Qs= -10+2P. Assume that the market for the particular good was initially the equilibrium (with no taxes, no regulation, etc.). Assume that a tax of $1 is imposed on the sellers of the good. How will the incidence of the tax be distributed between the sellers (producers) and the buyers (consumers) of the good?
Question 2. The market supply and demand curves for a product are: QS=0.5P (supply curve) QD=60–2P...
Question 2. The market supply and demand curves for a product are: QS=0.5P (supply curve) QD=60–2P (demand curve) where Q is the quantity of the product and P is the market price. (1). Calculate the equilibrium price, equilibrium quantity and total social welfare. (10 points) (2). Suppose that the market has changed from a perfectly competitive market to a monopoly market, calculate the new price–output combination and the total deadweight loss in the monopoly market. (10 points)
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT