The equilibrium price in the housing market is very high. What do you think will happen if the government imposes a very high price ceiling that is below but very close to the equilibrium price on the housing market, because a politician owns housing units in certain areas? How does that affect the poor and the market for housing? (c) Can you identify any losses or gains? Explain.
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Question 1 - Rent Control
(a) Use the market diagram to illustrate the imposition of a rent ceiling above the
(b) The equilibrium price in the housing market is very high. What do you think will happen if the government imposes a very high
(c) Can you identify any losses or gains? Explain.
Could I get an answer for part C?
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- Question 1 - Rent Control (a) Use the market diagram to illustrate the imposition of a rent ceiling above the market equilibrium price. What can you explain from the graph? (b) The equilibrium price in the housing market is very high. What do you think will happen if the government imposes a very high price ceiling that is below but very close to the equilibrium price on the housing market, because a politician owns housing units in certain areas? How does that affect the poor and the market for housing? (c) Can you identify any losses or gains? Explain. Question 2 - Price Floor The Agricultural Society persuades the government, in the interest of food security, to impose a price floor on local carrots in order to keep carrot farmers in the business. (a) Assess the welfare implications of this measure. (b) Assess the effectiveness of this measure in keeping farmers in carrot farming. Learning Activity 5.2: Taxation Question 3 - Taxation Suppose the federal government requires beer…Rent Control (a) Use the market diagram to illustrate the imposition of a rent ceiling above the market equilibrium price. What can you explain from the graph? (b) The equilibrium price in the housing market is very high. What do you think will happen if the government imposes a very high price ceiling that is below but very close to the equilibrium price on the housing market, because a politician owns housing units in certain areas? How does that affect the poor and the market for housing? (c) Can you identify any losses or gains? Explain.Question 3n On January 1, 2020, California initiated a state-wide rent control. Landlords may not raise rents more than 5% (in real terms) in a given year. Do you expect the price control to produce a surplus or shortage in 2020? It will create a shortage because it is a price ceiling It will create a surplus because it is a price ceiling It will create a shortage because it is a price floor It will create a surplus because it is a price floor
- Question 4: A government is planning to set a Price ceiling (Maximum price a producer can set). a) What is the consumer surplus and producer surplus at Equilibrium price? The government set a Price ceiling at $30 (in the diagram below). b) $90 Price i) ii) iii) $70 $50 $30 $10 10 20 30 Supply Price ceiling Demand Quantity What is the change in consumer surplus because of the price ceiling? What is the change in producer surplus because of the price ceiling? Who, the producer or the consumer, is benefitted from this government regulation?Q^d= 9.5 - 2p Q^s= 0.6p Price Ceiling. Suppose that the government imposes a price ceiling equal to P C = 1.60. (a) Draw a diagram showing your market for donuts and indicate the price ceiling on this diagram. Is this price ceiling binding in your market for donuts? Carefully explain how you came to your answer. (b) If this price ceiling is binding, how many donuts will be sold in this market following its imposition, and at what price? (c) If this is a binding price ceiling, does it lead to a shortage or a surplus of donuts? If so, calculate the amount of this shortage or surplus.Question 1 Suppose the market demand and supply equations for Face masks are given by: Market Demand: P = 400 - 4Q Market Supply: P = 4Q a. Find the equilibrium price and quantity in this market b. What is the value of consumer surplus in this market? c. What is the value of producer surplus in this market? d. What is the value of the social surplus in this market? e. Suppose the government imposes a price ceiling of Gh150, what will happen in this market f. Graph the demand and supply functions showing the price and its effects. g. Suppose the price elasticity of demand is 2, what will be the percentage change in price that will elicit a 25% change in quantity demanded? h. Calculate the price elasticity of demand at the equilibrium i. The aim of every firm is to maximize total revenue, as the marketing manager of this company, would you advise that the price of your company's products be increased? Explain your answer. j. Your company and other firms in this industry expect the price…
- Question 38 Please refer to the description of a tax on a market, represented by the graphic What is the price (including tax) that the buyer pays after the tax is imposed?Which of the following statements is (are) correct? (x) A legal maximum price at which a good can be sold is a price ceiling and a legal minimum price at which a good can be sold is a price floor. (y) If government imposes either a price ceiling or a price floor that is non-binding, the market will not move to a different quantity or price since a non-binding price control will not affect the quantity sold. (z) If government imposes either a price ceiling or a price floor that is binding, then the market will sell a larger quantity than the market that does not have price controls. Select one or more: a. (x), (y) and (z) b. (x) and (y) only c. (x) and (z) only d. (y) and (z) only e. (y) only xPrice(per pound) Quantity Supplied(pounds) Quantity Demanded(pounds) $7 80 30 $6 70 45 $5 60 60 $4 50 75 $3 40 90 $2 30 105 $1 20 120 The equilibrium price is $ per pound. Suppose that after a successful lobbying campaign by chocolate producers, the government imposes a price floor of $7 per pound. The price floor will lead to a surplus of pounds of chocolate. After a few years, chocolate producers are not happy. They realize that compared to the market equilibrium, their total revenue has fallen by $ . To compensate the chocolate producers, the government agrees to buy the entire surplus chocolate at the $7 price floor. Chocolate producers rejoice. Compared to the market equilibrium, their total revenue has now increased by $ .
- The graph accompanying this question shows a market in which the government has imposed an excise tax of $60 on producers. (a) What quantity will be sold in the market? (b) What price will consumers pay in the market? (c) By how much will consumer surplus change as a result of the tax? (d) By how much will the producer surplus change as a result of the tax? (e) How much revenue will the government collect from this excise tax? (1) Calculate the deadweight loss created by the tax. Price $120 $90 $30 0 1,000 2.000 3,000 QuantityProblem 02-06 (algo) Suppose demand and supply are given by Qd = 60 - Pand QS = 1.0P-20. a. What are the equilibrium quantity and price in this market? Equilibrium quantity: Equilibrium price: $ b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $52 is imposed in this market. Quantity demanded: Quantity supplied: Surplus: 20 Quantity demanded: Quantity supplied: Shortage: Full economic price: $ 40 C. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $35 is imposed in the market. Also, determine the full economic price paid by consumers.(Figure: Price Ceiling) Refer to the graph. Assume a price ceiling is implemented at $25. Using the graph answer the following questions: (a) Is the price ceiling binding or non-binding? (b) How many units are buyers willing to buy after the institution of the price ceiling? (c) How many units are sellers willing to sell after the institution of the price ceiling? (d) After the institution of the price ceiling, how many units are actually sold in this market? (e) Does the price ceiling cause a shortage or a surplus? How many units is this shortage or surplus? Price $40 $35 $30 $25 $20 $5 25 30 40 50 60 Supply 75 100 Demand Quantity