Set QD=QS
I) 92-8P = -4+4P
92+4 = 4P+8P
96 = 12P
P = 96/12 = 8
Q = 92-8*8 = 28
ii) The price that consumers pay before any tax = equilibrium price = 8
iii) The price that that producers receive = equilibrium price = 8
iv) Maximum reservation price = 11.5
Consumer surplus = 0.5*28*(11.5-8) = 49
v) Minimum reservation price = 1
Producer surplus = 0.5*28*(8-1) = 98
As per HOMEWORKLIB RULES, more than four parts are answered
1. Consider a perfectly competitive market where the mar- ket demand curve is given by Q...
1. Consider a perfectly competitive market where the mar- ket demand curve is given by Q = 92-8P and the market supply curve is given by Q = -4 + 4P. In each of the following situations (a-e), determine the following items (i-viii) i) The quantity sold in the market. ii) The price that consumers pay (before all taxes/subsidies). iii) The price that producers receive (after all taxes/subsidies). iv) The range of possible consumer surplus values. v) The range of...
Consider a perfectly competitive market where the market demand curve is given by Q = 76−8P and the market supply curve is given by Q=−8+4P. In situations (c), determine the following items (i-viii) (c) A market with subsidy S=9. i) The quantity sold in the market. ii) The price that consumers pay (before all taxes/subsidies). iii) The price that producers receive (after all taxes/subsidies). iv) The range of possible consumer surplus values. v) The range of possible producer surplus values....
Please answer question B 1. Consider a perfectly competitive market where the market demand curve is given by Q 72-4P and the market supply curve is given by Q-6+2P. In each of the following situations (a-e), determine the following items (i-vili) ) The quantity sold in the market. ii) The price that consumers pay (before all taxes/subsidies) ili) The price that producers receive (after all taxes/subsidies). iv) The range of possible consumer surplus values. v) The range of possible producer...
Consider a perfectly competitive market where the market demand curve is given by Q = 72−4P and the market supply curve is given by Q = −6 + 2P. In each of the following situations (a-e), determine the following items v) The range of possible producer surplus values. vi) The government receipts. vii) The net benefit. viii) The range of deadweight loss. (a) A market with no intervention. (b) A market with tax T = 3. (c) A market with...
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Question 1: In a perfectly competitive market, the demand curve is given as: Q=100-5P, the supply curve is given as Q=3P-12. Compute the total social surplus of this market. If the government impose a tax on the producers, and the tax rate is $2 per unit produced. What is the deadweight loss? If the government impose a tax on the consumers, and the tax rate is $2 per unit purchased, graphically show the change in the market equilibrium and the...
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1. Consider a perfectly competitive market with demand curve given by P, 200 D. The industry supply curve in this market is PsQs (a) Draw the demand-supply graph for this market. Calculate the quantit;y traded, equilibrium price for this market. Also calculate the Total Consumer Surplus (TCS) and Total Producer Surplus (TPS) for this market (b) Suppose that the government is considering a price ceiling, P1 - $20 Find the quantity traded, equilibrium price, TCS and TPS under the price...
3. Consider a perfectly inelastic supply curve at q = 1,013, and a perfectly elastic demand curve at p = 101. A subsidy of $5 per unit is given to producers. Using a diagram, explain how the subsidy is shared between consumers and producers. What is the Deadweight Loss? (30%)
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