*You must show your work. Consider a competitive market with the following market supply and demand functions: Ps=1.5 + 0.65Q; Pp = 95 – 0.05Q. (a) Derive the equilibrium price and quantity when there is no government intervention. (b) Suppose the government imposes a price ceiling of $60. Compute the deadweight welfare loss resulting from this action.
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- *You must show your work. Consider a competitive market with the following market supply and demand functions: Ps=1.5 + 0.65Q; Pp = 95 – 0.05Q. (a) Derive the equilibrium price and quantity when there is no government intervention. (b) Suppose the government imposes a price ceiling of $60. Compute the deadweight welfare loss resulting from this action.Demand and supply equations for housing market per month are given below. Demand for housing: Qp = 2500 – 0.5 P Supply of housing: Qs = -500 + P a) Draw the demand and supply curves for housing market in one graph. b) Find the equilibrium quantity and price for housing. c) Compute the consumer and producer surplus in equilibrium. d) Suppose that the government set a rent ceiling at $1800. What are the quantities of housing supplied and demanded at this price? In this case, is there a shortage or surplus of houses? e) How does the price ceiling affect the efficiency in the housing market? f) Calculate the deadweight loss in the housing market after the price ceiling is imposed by the g) Calculate the potential spending for housing search activities. government.Suppose demand and supply are given by? = 500-2P and ? =-100+3Pa) Which function is the demand function and why?b) Compute the equilibrium price and quantity in this market?c) Compute the consumer surplus and producer surplus.d) Suppose a GHC 1 exercise tax is imposed on the good. Determine the new equilibrium price and quantity.e) Compute the tax revenue to the government. f) Compute the deadweight loss resulting from the tax.
- The market for tomatoes is competitive and characterized by a demand function of the form QD = 60000 - 4000p and a supply function of the form Qs = 6000p -30000, where quantity is measured in kilograms and p is the price per kilogram. %3D Suppose the government starts to charge sales tax on tomatoes. The tax is at 5% for every dollar a consumer spends on on tomatoes. 1. Calculate the equilibrium prices and quantity under the value tax 2. Calculate the government tax revenue, and the deadweight loss of the tax.Assume that the demand and supply functions for each bottle of Beer ABC are. Quantity Demand= 1,000 – 400P Quantity Supply = 100P If a price ceiling is set at $2.50 for each bottle, what will be the impact on the market equilibrium? Any changes in quantity demand or quantity supplied?Suppose 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…
- Assume that the markets for sugar cane, rum and whiskey are initially in equilibrium (i.e., supply equals demand in each case). Assume further that a good harvest impacts the world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes in consumption. If the government implements a price restriction in the sugar cane market with the aim of protecting the farmers. Explain how will this impact the revenues for sugar growers, rum producers and whiskey producers?A binding price ceiling is imposed in the market for aspirin. At the ceiling price: a) the quantity supplied of aspirin exceeds the quantity demanded. b) the quantity demanded of aspirin equals the quantity supplied. c) the quantity demanded of aspirin exceeds the quantity supplied. d) the quantity demanded of aspirin will be artificially restricted by the price ceiling.Assume that demand in the market for consoles is QD = 1000 - P and supply is QS = 2P - 200. d) Suppose that the government imposed a $300 price ceiling on consoles. How many units are sold? e) What is consumer surplus now? What is producer surplus? What is the "deadweight loss" from this policy?
- The demand curve for a product is given by q = 120,000-500p and the supply curve is given by q = 1000p for 0 ≤ q ≤ 120,000, where price, p, is in dollars. (a) At a price of $100, what quantity are consumers willing to buy and what quantity are producers willing to supply? Will the market push prices up or down? (b) Find the equilibrium price and quantity. Does your answer to part (a) support the observation that mar- ket forces tend to push prices closer to the equilib- rium price?Suppose a market is described by the following demand and supply curves, respectively: Qd =50−P Qs = 0.5P − 10 (a) Calculate the equilibrium price and quantity.(b) Plot the supply and demand curves on a single graph. (c) Now, supposed the government imposes a price ceiling of $30 in this market. Show, on the same graph in part (b), the effect of this price ceiling. Calculate the equilibrium price and quantity. Is there a shortage or a surplus? Of how many units? What is the full economic price in this market? Show, on the same graph in part (b), the loss of social welfare and calculate the dollar value of this loss.The market demand and supply equations for theme park in a city are given by P = 30 – 0.005QD and P = 10 + 0.005QS, where P is the price in dollars and QD is the quantity of theme-park tickets demanded and QS is the quantity of theme park ticket supplied. Given that the equilibrium price of theme park tickets is $20, equilibrium quantity of theme park tickets is 2000 and the consumer surplus is 10000 and producer surplus is 10000: Explain the implications of the welfare of consumers, producers and the society when the price of theme park ticket is fixed at $15. Support your answers with a graph of the theme park tickets market.