Question

The demand for sunglasses is given by D(p) = 100 − 2 p and the supply curve is given by S(p) =3p

(a) Compute the equilibrium price and equilibrium quantity of sunglasses.

(b) Sketch both the demand and supply curves on the same graph (be sure to label your axes correctly).

(c) Determine the value of consumer surplus and producer surplus at the equilibrium values. Suppose all sunglasses are imported from China. Suppose also that the government imposes an import tariff of $10 per unit. Show working

(d) Determine the new equilibrium values of price and quality. show working

(e) Determine the tariff’s impact on consumer surplus, producer surplus, and total surplus.

Answer #1

D. The new equlibrium price is 30 and equilibrium quantity is 40

E. After tariff the consumer surplus reduces, the producer surplus reduces and total surplus also reduces.

Consider the market for butter in
Saudi Arabia. The demand and supply relations are given as
follows:
Demand:
QD = 12 - 2P
Supply:
Qs = 3P - 3.
P is the price of butter.
Calculate:
Equilibrium price _____________
2. Equilibrium quantity _____________
Consumer surplus
___________
4. Producer surplus ___________
Draw the demand and supply graphs. Show the equilibrium price
and quantity, consumer surplus and producer surplus in the graph
below. Graphs must be on scale.
Suppose government imposes...

4. Suppose the domestic supply and demand curves for petroleum
in the U.S. are, Qs = 10P - 300 Qd = 3000 - 20P Let the world trade
price be $50 per barrel. 1) What is the equilibrium quantity of
imports? 2) Suppose a specific tariff of $10 per barrel is imposed.
Calculate Consumer surplus, producer surplus, and tariff revenue.
3) Suppose the government imposes an import quota of 1200 units of
barrels. Find the trading price for petroleum.

Given the previous questions with a world price of 34, and the
domestic demand and supply curves given by the following
equations:
D: P= 80 - 2Q S: P= 10 + 3Q
Suppose the government imposes a tariff equal to 6 which
increases the price in the domestic market to 40. Given the tariff
and new price to consumers, domestic consumers will now import
______ units of the good, the government will collect ______ in
tariff revenue, and the total...

Suppose the world price for a good
is 40 and the domestic demand-and-supply curves are given by the
following equations:
Demand: P = 80 – 2Q
Supply: P = 5 + 3Q
a. How much is
consumed?
b. How much is produced
at home?
c. What are the values
of consumer and producer surplus?
d. If a tariff of 10
percent is imposed, by how much do consumption and
domestic production change?
e. What is the change in
consumer and...

Suppose the demand and supply for a product is given by the
following equations:
p=d(q)=−0.8q+150
(Demand)
p=s(q)=5.2q
(Supply)
For both functions, q is the quantity and p is the price.
Find the equilibrium point. (Equilibrium price and equilibrium
quantity) (1.5 Marks)
Compute the consumer surplus. (1.5 Marks)
Compute the producer surplus. (1.5 Marks)

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 inverse demand curve for delivery meals is: Pd=18-3Qd the
inverse supply curve is: Ps=3Qs where p is price of meal in
dollars, Q is quantity in thousands of meals
a.) solve for equilibrium price and quantity
b.) draw the supply and demand curves and the equilibrium
outcome on axes below and label graph
c.) Calculate the consumer surplus and producer surplus in this
market, and show them on the set of axes above.
d.) suppose the government imposes a...

Suppose that the world price for a good is 120 and the domestic
demand-and-supply curves are given by the following equations:
Demand: P = 200 – 8Q
Supply: P = 20 + 10Q
a. How much is domestic
consumption?
b. How much is domestic
production?
c. Calculate the values of
consumer and producer surplus.
d. If a tariff of 30% is imposed,
how much do consumption and domestic production change?
e. What is the change...

Suppose the market demand for a commodity is given by the
download sloping linear demand function:
P(Q) = 3000 - 6Q
where P is a price and Q is quantity. Furthermore, suppose the
market supply curve is given by the equation:
P(Q) = 4Q
a) Calculate the equilibrium price, quantity, consumer surplus
and producer surplus.
b) Given the equilibrium price calculated above (say's P*),
suppose the government imposes a price floor given by P' > P*.
Pick any such P'...

Suppose the demand curve is given by Qd=75-5P and the supply
curve is given by Qs=P-3. SHOW YOUR WORK in the space below (type
it out, line by line), and solve for the equilibrium price, the
equilibrium quantity, the consumer surplus, the producer surplus,
and the total surplus.

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