Question

Please showing all working and provide accurate answers.

This question examines the market for ring pops. You will use the formulas for a demand and supply curve to identify the equilibrium market price and quantity and analyze the benefits that consumers and producers derive from participation in this market. Below, you have the formulas for the demand curve and the supply curve for ring pops. If you plug any price into the formula for the demand function, you get the quantity demanded at that price. If you plug any price into the supply function, you get the quantity supplied at that price. The Demand Function for ring pops: The Supply Function for ring pops: Q = 12 - 2P Q = 2P/5 Task 1: Use the table below to find the quantity demanded and the quantity supplied of ring pops at each price. Price Quantity of Ring Pops Demanded 12-2(1) = 10 12-2(2) = 8 Quantity of Ring Pops Supplied 2(1)/5 = 0.4 0.8 2(3)/5 = 1.2 2(4)/5 = 1.6 2.0 2(6)/5 = 2.4 12-2(4) = 4 12-2(5) = 2 12-2(6) = 0 Task 2: What is the equilibrium price and quantity in this market? Task 3: What is the amount of consumer surplus that consumers enjoy from participating in this market? Task 4: What is the amount of producer surplus that producers enjoy from participating in this market? What is the amount of total surplus?

Answer 1

TASK-I In Equilibrium, market clear le demand = Supply Price 0.4 106 TASK 2 At Equilibrium Quantity demanded = Quambilny supplied Qd = Qs in at Q= 2 so equilibrium quam hilig be (@") = 2 e equilibrium Price be (pt) = $5 TASK-3P 2016) TASK-3 To supply (Qa ) Es Equilibrium point. * 1,00 a Demand /Q= 12-28 OO ---* # - Country . Suuplus 00)-produces suplus 010) 112,0) Q

Amount of Cous uncer a suples " Area of a triangle BCE = £x Base x height - 1 x BEX BC ***116-5)x2 Consumer Surplus = $1* TASKU Amount of produce suples = Area of a treugle ARE 21 x хBE = { 15-0) *2 * producen surplees = $5] Total sufles produces t Consunelę T surplus Surfbus $5 + $1 = $6 : Amounts of total staples - $60€ freaola AAPE