After price floor is set, It will lead to surplus. The demand will fall from 40 units to 20 units.
Quantity demanded will shift from 40 Units to 20 Units
Consumer Surplus will be given by area of triangle CHD = 1/2 x 20 x 10 = 100 sq. units (as shown in the figure in the picture attached)
Producer surplus after price floor = Area of Triangle AMG + Area of rectangle HDMG = 1/2 x 5 x 20 + 15 x 20 = 350 sq. units
Dead Weight Loss = Area of Triangle BDG = 1/2 x 15 x 20 = 150 sq. units
2. If we place a price floor of $30 do we have a surplus or shortage?...
3. If we place a price ceiling of $15 do we have a surplus or shortage? By how much? Label producer surplus, consumer surplus, and dead weight loss. What is the quantity sold? Calculate the area of consumer surplus, producer surplus, and dead weight loss. $60 $40 $20 20 40
3. If we place a price ceiling of $15 do we have a surplus or shortage? By how much? Label producer surplus, consumer surplus, and dead weight loss. What is the quantity sold? Calculate the area of consumer surplus, producer surplus, and dead weight loss. $60 $40 $20 |
7.25 = 100 = lauld - TU PS 20 40 60 3. If we place a price ceiling of $15 do we have a surplus or shortage? By how much? Label producer surplus, consumer surplus, and dead weight loss. What is the quantity sold? Calculate the area of consumer surplus, producer surplus, and dead weight loss. $60 $40 $20 20 40 60 e
Name 1. Find the equilibrium, price and quantity, Label consumer surplus, and producer surplus in the graph. Calculate the area of consumer surplus, and producer surplus. $60 $40 $20 20 40 60 Q
1. Find the equilibrium, price and quantity, Label consumer surplus, and producer surplus in the graph. Calculate the area of consumer surplus, and producer surplus. $60 20 40 600
Explain the impacts to the consumer surplus, producer surplus, and deadweight loss if the price floor is below the equilibrium price? w Market demand is given as Qd 100 - 2P and market supply is given as Qs = P + 10. The equilibrium price is $30 and the equilibrium quantity is 40 units. At a price ceiling of $19, calculate the deadweight loss. Answer:
shortage, Surplus and Gov’t. Price Controls Assume: Sellers put the Price for the angelfish, at $100. What is the “effective” Quantity? What is happening, at this Price? How much of one? Will the Price tend to rise or fall? If this price is imposed by the government (legal force) - what is this type of Price Control called? At the off-equilibrium Price of $100, What Area shows Total Revenue (Total Expenditures)? What Area shows Total Cost (to Seller)? What...
4) Welfare Analysis: Price Ceiling (10 points) Price ($) Supply Demand 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 Quantity Now imagine a price ceiling of $30. f. What effect does this have on Consumer and Producer Surplus? Start by clearly labeling the new CS and PS on the graph. g. What are the new dollar values for producer, consumer, and total surplus? h. Is there a Deadweight Loss? Find its value by...
Price of almonds P (dollars per ton) Price floor Quantity of almonds (tons) Figure 4-6 shows the demand and supply curves for the almond market. The government believes that the equilibrium pr is too low and tries to help almond growers by setting a price floor at PT 5) 5) Refer to Figure 4-6. What area represents the portion of consumer surplus that has been transferred to producer surplus as a result of the price floor? А) в B) B+E...