Question

Question 3 a. What is price ceiling and why will the government implement such a policy?...

Question 3

a. What is price ceiling and why will the government implement such a policy?

b. The market demand and supply equations for a commodity are

QD = 50 - 10P

QS = 20 + 2.5P

i. What is the equilibrium price and equilibrium quantity?

ii. Suppose the government imposes a price ceiling on the commodity of $3.00 and demand increases to QD = 75 - 10P.What is the impact on the market of the government’s action?

iii. In a single diagram, illustrate your answers to parts a and b.

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
QUESTION 4 Suppose the market supply for Good X is given by QXS = -100 +...
QUESTION 4 Suppose the market supply for Good X is given by QXS = -100 + 5PX. Compute and illustrate with completely labelled diagram the producer surplus if the equilibrium price of X is $100 per unit (show the relevant calculation). The daily market demand and supply for beef in New york is given by: Qd= 16,000 – 1,000P Qs=   2,000 + 1,000P The quantity and price are measured in tonnes and Dollars, respectively. Determine the equilibrium quantity and price...
You are given the following information about the demand for and supply of widgets in the...
You are given the following information about the demand for and supply of widgets in the Republic of Xénïa. Answer the questions that follow. If you draw diagrams, use a ruler, label the diagrams completely, show demand choke price, demand intercept, supply choke price, supply intercept, etc. Do not use double columns or put rectangles or squares around your answers. Use “D” for demand and “S” for supply. Do not use Qd or Qs to label your diagrams. Although you...
Suppose a market is characterized by the following supply and demand equations: QD=1,000-5P QS=-500+10P 1.)Determine equilibrium...
Suppose a market is characterized by the following supply and demand equations: QD=1,000-5P QS=-500+10P 1.)Determine equilibrium price and quantity. 2.)Suppose that the government taxes production such that for every unit produced, sellers must pay the government $10. Determine the new equilibrium price(s) and quantity. 3.)Suppose that instead of taxes, the government imposes a price floor such that the minimum amount the good can be sold for is $150. Determine the new equilibrium price and quantity. 4.)Determine producer surplus, consumer surplus,...
2. (30 Marks) Suppose a market is characterized by the following supply and demand equations: QD=1,000-5P...
2. Suppose a market is characterized by the following supply and demand equations: QD=1,000-5P QS=-500+10P A) Determine equilibrium price and quantity. B) Suppose that the government taxes production such that for every unit produced, sellers must pay the government $10. Determine the new equilibrium price(s) and quantity. C) Suppose that instead of taxes, the government imposes a price floor such that the minimum amount the good can be sold for is $150. Determine the new equilibrium price and quantity. D)...
Qd= 800-16P Qs= -40+4P Assume the government places a price ceiling at $3 below the mkt...
Qd= 800-16P Qs= -40+4P Assume the government places a price ceiling at $3 below the mkt equilibrium price. What will be the effect? Question 7 options: There will be a shortage of 50 units There will be a surplus of 50 units There will be a shortage of 60 units There will be a surplus of 60 units
Suppose the market for potatoes can be expressed as follows:                                &nb
Suppose the market for potatoes can be expressed as follows:                                  Demand: QD = 400 – 16P Supply: QS = –40 + 4P a) Calculate the equilibrium price and equilibrium quantity.    b) Suppose the government sets a price ceiling of $14 per unit, what quantity demanded and quantity supplied would be realized?    c) Neatly sketch a diagram to represent parts a and b on a single graph. - Make sure to illustrate the equilibrium price and quantity, the price...
Following table shows information about the demand for apples in the wholesale mar- ket. Price, P...
Following table shows information about the demand for apples in the wholesale mar- ket. Price, P ($/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 = $3/lb? Following table shows information about the supply of 20 lbs box of...
Question A1 (15 marks) (a) Answer the following questions by using demand and supply analysis for...
Question A1 (a) Answer the following questions by using demand and supply analysis for the market of printer. (i) Suppose the production of printer is now completely-automated. Use the demand and supply analysis to explain how it affects the market of printer. What are the effects on the equilibrium price and equilibrium quantity of printer? No diagram is needed but you need to describe how the curve(s) shift(s). (ii) Suppose the price of ink for printers increases substantially recently. Use...
Suppose the supply of coal is perfectly inelastic, and the price elasticity of demand for coal...
Suppose the supply of coal is perfectly inelastic, and the price elasticity of demand for coal is -0.4. If the government imposes a binding price ceiling for coal at a price that is 20 percent below the market equilibrium price, what is the impact of this policy on the market quantity? A) Excess demand equals 80 percent of the market equilibrium quantity B) Excess demand equals 8 percent of the market equilibrium quantity C) The policy does not affect the...
1. [Market Equilibrium] Following table shows information about the demand for apples in the wholesale market....
1. [Market Equilibrium] Following table shows information about the demand for apples in the wholesale market. Price, P ($/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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT