Question

2. Consider a perfectly competitive market with market supply
Q_{s}=-2+P and market demand Q^{d} = 30-P. What is
consumer surplus in this market?

Answer #1

Answer 2

Market is in equilibrium when Quantity demand = quantity supplied(i.e. Qd = Qs) and Equilibrium or market price is that price at which Qs = Qd.

Here Qs = -2 + P and Qd = 30 - P

At equilibrium , Qs = Qd => -2 + P = 30 - P => P = 16.

So, Q = -2 + P = -2 + 16 = 14

=> equilibrium Price(P) = 16 and equilibrium Quantity(Q) = 14

Consumer surplus is the area above Price level and below demand curve.

Hence Consumer Surplus = A

= (1/2)(14)(30 - 16)

= 98.

Hence Consumer Surplus = 98

The corn market is perfectly competitive, and the market supply
and demand curves are given by the following equation: Qd
=50,000,000 – 2,000,000 p Qs = 10,000,000 +5,500,000 p Where Qd and
Qs are quantity demanded and quantity supplied measured in bushels,
and P= price per bushel.
1) Determine consumer surplus at the equilibrium price and
quantity.

Consider the following - Market Demand: QD = 300 − 5P
Market Supply: QS = 5P
Total Cost: TC = 150 + q2
Marginal Cost: MC = 2q
Solve for the profit maximizing output the perfectly competitive
firm would produce.
Solve for the maximum profits.
Solve for the productively efficient output.

In
a competitive market, the market demand is Qd= 60-6P and the market
supply is Qs=4P. The amount sold under a price floor of $3 is
a) 24 units
b) 12 units
c) 42 units
d) 30 units

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.

If demand in the cake market is Qd= 600 - 10p, and unrestricted
supply is Qs = 200 + 10p, what is the effect on price, quantity,
producer, and consumer surplus of a baker’s license that reduces
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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

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...

Consider the following supply and demand functions qD= 8-p qS=
-4 +2p Assuming the market is distortion free, what is the total
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Given the demand and supply for water dispensers:
Qd = 720 - 17 P
Qs = -70 + 20 P
1. The market equilibrium price is
2. The market equilibrium quantity is
3. What is the value of the demand curve's vertical intercept
?
4. What is the value of the supply curve's vertical
intercept?
5. What is the Consumer's Surplus?
6. What is the Producer's Surplus?
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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)

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