Question: Given, P = 200 - 3Q P = 50 + 2Q What is the market equilibrium P and Q? If the price goes up by $10, how will the customers react? (Hint: Find PED and comment. First find new P* and Q*) If the government regulates the market by imposing 10% sales tax, what will be the change in producer surplus? Imagine there is no tax, and the market is competitive. What will be the profit maximization output level?
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Please give a neat and step-by-step solution.
Question:
Given, P = 200 - 3Q
P = 50 + 2Q
- What is the
market equilibrium P and Q? - If the
price goes up by $10, how will the customers react? (Hint: FindPED and comment. First find new P* and Q*) - If the government regulates the market by imposing 10% sales tax, what will be the change in
producer surplus ? - Imagine there is no tax, and the market is competitive. What will be the profit maximization output level?
Step by step
Solved in 3 steps
- Please written by computer source Suppose that the demand curve for a product is given by Q = 100 −10p and the supply curve is Q = 10p. Assume that income effects (elasticities) are small so consumer surplus is a good measure of consumer welfare. (a) What is the equilibrium price and quantity with no distortions? (b) The government imposes a tax of $2.00 per unit sold. What is the new equilibrium quantity? Sketch the market equilibrium in a graph. (c) Given the tax what is the change in consumer surplus? What is the change in producer surplus? What is the change in government revenue? What is the net Dead Weight Loss from the tax? (d) Say the government proposes to use the revenue from the tax to pay for snacks in our last ECON 312A lecture. The total social benefits from the snacks would be $82.00. Will the tax increase overall welfare if the revenue is used to buy the snacks? What is the dollar value of the net gain or loss to society?A Quiz: CH5 Main Problem - You ha x b My Questions | bartleby + -> A yvcc.instructure.com/courses/2227256/quizzes/7072867/take/questions/143032293 Use the graph below to answer this question: Based on this graph, suppose the equilibrium price and quantity remain the same but the demand curve becomes steeper (more inelastic demand). What will that do to the consumer or producer surplus? $16 $12 6 It will increase the consumer surplus. It will reduce the producer surplus. O It will reduce the consumer surplus. O It will leave both surpluses unchanged. O It will increase the producer surplus. >Consider the market for some product X that is represented in the accompanying demand-and-supply diagram. a. Calculate the total economic surplus in this market at the free-market equilibrium price and quantity. The total economic surplus is $280 per day. (Round your response to the nearest cent as needed.) b. Calculate the total economic surplus in this market when a price ceiling at $21 is in effect. The total economic surplus is $ per day. (Round your response to the nearest cent as needed.) c. After imposition of the price ceiling at $21, how many units of this good are no longer being produced and consumed per day compared to the free-market equilibrium? unit(s) of this good are no longer being produced and consumed per day compared to the free-market equilibrium. (Round your response to the nearest whole number as needed.) d. Calculate the deadweight loss that results from the imposition of the price ceiling at $21. per day. The deadweight loss that results from the imposition of…
- Don't use pen or paper Suppose market demand and supply are characterized by the following equations: p = 12 - 0.4 Qd p = 2 + 0.4 Qs When the market clears, what is the economic surplus? (Round your answer to one decimal place.)Consider the market for some product X that is represented in the accompanying demand-and-supply diagram. a. Calculate the total economic surplus in this market at the free-market equilibrium price and quantity. The total economic surplus is $ per day. (Round your response to the nearest cent as needed.) b. Calculate the total economic surplus in this market when a price ceiling at $14 is in effect. The total economic surplus is $ per day. (Round your response to the nearest cent as needed.) c. After imposition of the price ceiling at $14, how many units of this good are no longer being produced and consumed per day compared to the free-market equilibrium? unit(s) of this good are no longer being produced and consumed per day compared to the free-market equilibrium. (Round your response to the nearest whole number as needed.) d. Calculate the deadweight loss that results from the imposition of the price ceiling at $14. Price ($) 38.00 34.00- 30.00- 26.00+ 22.00- 18.00- 14.00- 10.00-…The demand and supply equations for a product are: Q* = 0.2 300 – 6P and Q' = -40 + 6P. Determine the market equilibrium and draw graphs. Suppose that the government decides to impose a flat tax of 10% on each unit sold. Show that the price that consumers pay would be the same if the government imposed a tax of Rs. 1.70 per unit sold. Draw graphs and explain. Also calculate the total revenue earned by sellers before and after the tax, the tax revenue raised by the government, changes in consumer and producers surplus and dead weight loss.
- Consider the market for some product X that is represented in the accompanying demand-and-supply diagram. a. Calculate the total economic surplus in this market at the free-market equilibrium price and quantity The total economic surplus is $ 120 per day (Round your response to the nearest cent as needed) b. Calculate the total economic surplus in this market when a price ceiling at $7 is in effect The total economic surplus is $90 per day. (Round your response to the nearest cent as needed) c. After imposition of the price ceiling at $7, how many units of this good are no longer being produced and consumed per day compared to the free-market equilibrium? unit(s) of this good are no longer being produced and consumed per day compared to the free-market equilibrium (Round your response to the nearest whole number as needed) Price ($) 19.00 17.00 15.00 13.00- 11.00- 9.00- 7.00- 5.00 3.00- 1.00- 0 10 15 20 25 Quantity (units per day) 30 S D 35 GCan you help me with this please? If there is a surplus of goods in the market would that still lead to a producer surplus? Producer surplus being defined as the amount a seller is paid for a good minus the sellers cost of providing it. Referring to question 1: The amount of producer surplus in this market is $_____. Make sure you round your answer to two decimal places (and include the decimal point and two decimal places to the right in your answer, and if your answer requires a comma, put the comma in the appropriate place).
- Suppose that the demand curve for wheat is and the supply curve is QD = 400 - 40p Consumer surplus Qs = 40p. The government provides producers with a specific subsidy of s = $2 per unit. How do the equilibrium price and quantity change? The equilibrium price decreases by $1 and the equilibrium quantity increases by $40 units. (Enter numeric responses using real numbers rounded to two decimal places.) Wh effe does this tax (subsidy) have on consumer surplus, producer surplus, government revenue, welfare, and deadweight lo by $.The demand and supply equations for a product are: Q^d=300-6p and Q^x=-40+6p. . Determine the market Equilibrium and draw graphs. Suppose that the government decides to impose a flat tax of 10% on each unit sold. Show that the price that consumers pay would be the same if the government imposed a tax of Rs. 1.70 per unit sold. Draw graph and explain . Also calculate the total revenue earned by sellers before and after the tax, the tax revenue raised by the government, changes in consumer and producers surplus and dead weight lossSuppose the market demand for organic grass-fed beef is given by Q=100-2P and the supply is given by Q= P/2 (quantity is given in thousand pounds). A) Find the equilibrium price of a pound of beef and the equilibrium quantity. B) Find the consumer surplus (CS) and producer surplus (PS) at the market equilibrium point. C) How will the equilibrium change if the government imposes a price ceiling of $20/pound? D) Show this market with the price ceiling in a supply and demand graph. E) Consider that the consumers who bought the beef at $20/pound are the ones with the highest willingness to pay (scenario 1), what is the new consumer surplus (CSnew) and the new producer surplus (PSnew)? F) What is the deadweight loss (DWL) after the price ceiling in scenario 1? G) What would happen in this market if, instead, the consumers who bought the beef were the ones with the lowest willingness to pay (scenario 2)? (Hint: You don’t have to show it mathematically, or graphically, but write…
