Question

En how on how you solve it. II. Provide t Figure 1 180 P=- 2 Qd +160 P=2Qs +20 TII 20 30 40 50 10 60 Dewand 80 90 70 Q Iculate consumer surplus. 15 point) 1225 floor of $100 in this market, then by how much consumer surplus 1225 900-31 1. At the equilibrium price, calculate consumer sur 2. If the government imposes a price floor of $100 in this m will decrease? (5 point] 3. If the government imposes a price ceiling of $80 in this mar highest willing to pay purchase the good, calculate consumer surplus 1500 Figure 2 Price ses a price ceiling of $80 in this market, then, assuming those with the

Answer 1

TADINO 160 Supply Price floor -Price ceiling - Demand 3035 to P=-2 Od + 160 P = 2 Os +20 - Od = P-160 - Od = 80-14 - 20s = P-20 > Os = P- so - At equilibrium demand = Supply Od = Os 80-P/2 = P6-10

- PACE NO ARROKA DATE: In eq. On Od = 80-90% => [Od = 35 = Us At equilibrium prices Consumer surplus = 1x basex height =! X 35x (160-40) 2 35x35 · 1225 2. When govt imposes price floor consumer surplus - 1 x 30 (160-100) = 900 decrease in consumer surplus = 1225-900 = 325 3. When got imposes price ceiling Som consumer surplus = I a base height + length x breadh 51. 30 x (1 60480) +(100-80)* 30 2 = 9oot 600 = 15oo