Homework Answers
Market equilibrium takes place at the point demand and supply curves intersect each other. This takes place at price P* and quantity Q*
1.
Consumer surplus is the area below demand curve and above price line
Consumer surplus = Area A+B+C
Correct answer: A,B,C
2.
Producer surplus is the area below price line and above supply curve
Producer surplus = D+E
Correct answer: D,E
3.
If price increases to P2, consumer surplus falls to just A
So , area lost = B+C
Correct answer: B,C
4.
If price increases to P2, producer surplus changes to B+D
Area lost = E
Correct answer: E
5.
Total surplus before: A+B+C+D+E
Total surplus after: A+B+D
Surplus lost = C+E
Correct answer: C,E
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Use the areas labeled in the market represented in the figure below to answer the following...
Refer to a figure that shows the market for backpack to answer the following questions. Price...
Refer to a figure that shows the market for backpack to answer the following questions. Price Supply (S Demand 30 60 90 120 Number of Laptop 1) The equilibrium price is $ and the equilibrium quantity is The consumer surplus at the market equilibrium is 0.5 x(120- 1x60 = $ The producer surplus at the market equilibrium is $ As a result, the total surplus at the market equilibrium is $ 2) Suppose that the price per laptop is $90....
21 The panel below, the price is P2 and the quantity supplied is Q1, if price...
21 The panel below, the price is P2 and the quantity supplied is Q1, if price rises to PI, what do the area C and D represent? a) addtional producer surplus of existing sellers. b) Jecrease producers surplus of existing suppliers. c) new sellers entering the market. d) new sellers exiting the market e) A & C are correct. B and D are correct.
Supply 29. Refer to Figure 6. When the price rises from PI to P2, which area...
Supply 29. Refer to Figure 6. When the price rises from PI to P2, which area represents the increase in producer surplus to existing producers? a. BCG b. ACH c. DGH d. ABGD 30. Refer to Figure 6. Which area represents the increase in producer surplus when the price rises from P1 to P2 due to new producers entering the market? a. BCG b. ACH c. DGH d. AHGB Figure 7 Focus ed States) E E
Price per pound (S) Supply A P2 B C P D Po H G Demand Quantity...
Price per pound (S) Supply A P2 B C P D Po H G Demand Quantity of granola (ibs) O2 Figure 4-3 shows the market for granola. The market is initially in equilibrium at a price of P1 and a quantity of Q1. Now suppose producers decide to cut output to Q2in order to raise the price to P2 Refer to Figure 4-3. What area represents producer surplus at P2? A+ B+ D B+ D B+ D+ G B+ C+...
2. Refer to Figure below and answer the following questions. The figure plots the domestic market...
2. Refer to Figure below and answer the following questions. The figure plots the domestic market demand and supply for cigarette. Assume that the size of external damage/cost per unit consumption of cigarette is estimated to be 3 dollars. 1P 10 20 30 40 50 60 70 80 90 100 110 120 2 (a) What is the equilibrium price (without any interventions)? Calculate the consumer surplus, the producer surplus, and the total surplus. (b) Find the socially optimal quantity. (c)...
QUESTION 8 Refer to the information provided in Figure 4.6 below to answer the questions that...
QUESTION 8 Refer to the information provided in Figure 4.6 below to answer the questions that follow Equilibrium in this market occurs at the intersection of curves S and D Price/unitA P3に BIc P2 Quantity/time Figure 4.6 In figure 4.6, producer surplus is area C if price is D below P1 O Pl. P3
Use the following information to answer the questions that follow. The following graph depicts a market...
Use the following information to answer the questions that follow. The following graph depicts a market where a tax has been imposed. Po was the equilibrium price before the tax was imposed, and was the equilibrium quantity. After the tax, Pc is the price that consumers pay, and Ps is the price that producers receive. QT units are sold after the tax is imposed. NOTE: The areas B and Care rectangles that are divided by the supply curve S7. Include...
The following equations represent the inverse supply and demand functions in the market for Good A:...
The following equations represent the inverse supply and demand functions in the market for Good A: PC =80-1⁄2QD PP =14+QS where PC and PP are the prices paid by consumers and received by producers respectively. QD and QS are the quantities demanded and supplied, respectively. Suppose the government is considering imposing a tax of $6 per unit of Good A. a) Compute the competitive market equilibrium price and output without the tax. b) Compute producer surplus and consumer surplus without...
I know the answers to these but I need an explanation. Please draw on the graph....
I know the answers to these but I need an explanation. Please
draw on the graph. For 31,32 and 33
Figure CPS. The US Textile Market Suppose D is market demand and S is the market supply curve of domestic producers. After imports are allowed, foreign producers shift the market supply to S' P 25 20 15 10 5 60 Q 10 20 30 40 50 See Figure CPS. Before the foreign producers enter the producer surplus of domestic producers...
Use the linear demand and supply curves shown below to answer the following questions.You must show...
Use the linear demand
and supply curves shown below to answer the following questions.You
must show all calculations step-by-step .
a) The market or equilibrium price is $__________.
b) When 10,000 units
are produced and consumed, total consumer surplus is $__________,
and total producer surplus is $__________.
c) At the market
price in part a, the net gain to consumers when 10,000
units are purchased is $__________.
d) At the market
price in part a, the net gain to producers...
Refer to a figure that shows the market for backpack to answer the following questions. Price Supply (S Demand 30 60 90 120 Number of Laptop 1) The equilibrium price is $ and the equilibrium quantity is The consumer surplus at the market equilibrium is 0.5 x(120- 1x60 = $ The producer surplus at the market equilibrium is $ As a result, the total surplus at the market equilibrium is $ 2) Suppose that the price per laptop is $90....
21 The panel below, the price is P2 and the quantity supplied is Q1, if price rises to PI, what do the area C and D represent? a) addtional producer surplus of existing sellers. b) Jecrease producers surplus of existing suppliers. c) new sellers entering the market. d) new sellers exiting the market e) A & C are correct. B and D are correct.
Supply 29. Refer to Figure 6. When the price rises from PI to P2, which area represents the increase in producer surplus to existing producers? a. BCG b. ACH c. DGH d. ABGD 30. Refer to Figure 6. Which area represents the increase in producer surplus when the price rises from P1 to P2 due to new producers entering the market? a. BCG b. ACH c. DGH d. AHGB Figure 7 Focus ed States) E E
Price per pound (S) Supply A P2 B C P D Po H G Demand Quantity of granola (ibs) O2 Figure 4-3 shows the market for granola. The market is initially in equilibrium at a price of P1 and a quantity of Q1. Now suppose producers decide to cut output to Q2in order to raise the price to P2 Refer to Figure 4-3. What area represents producer surplus at P2? A+ B+ D B+ D B+ D+ G B+ C+...
2. Refer to Figure below and answer the following questions. The figure plots the domestic market demand and supply for cigarette. Assume that the size of external damage/cost per unit consumption of cigarette is estimated to be 3 dollars. 1P 10 20 30 40 50 60 70 80 90 100 110 120 2 (a) What is the equilibrium price (without any interventions)? Calculate the consumer surplus, the producer surplus, and the total surplus. (b) Find the socially optimal quantity. (c)...
QUESTION 8 Refer to the information provided in Figure 4.6 below to answer the questions that follow Equilibrium in this market occurs at the intersection of curves S and D Price/unitA P3に BIc P2 Quantity/time Figure 4.6 In figure 4.6, producer surplus is area C if price is D below P1 O Pl. P3
Use the following information to answer the questions that follow. The following graph depicts a market where a tax has been imposed. Po was the equilibrium price before the tax was imposed, and was the equilibrium quantity. After the tax, Pc is the price that consumers pay, and Ps is the price that producers receive. QT units are sold after the tax is imposed. NOTE: The areas B and Care rectangles that are divided by the supply curve S7. Include...
I know the answers to these but I need an explanation. Please
draw on the graph. For 31,32 and 33
Figure CPS. The US Textile Market Suppose D is market demand and S is the market supply curve of domestic producers. After imports are allowed, foreign producers shift the market supply to S' P 25 20 15 10 5 60 Q 10 20 30 40 50 See Figure CPS. Before the foreign producers enter the producer surplus of domestic producers...
Use the linear demand
and supply curves shown below to answer the following questions.You
must show all calculations step-by-step .
a) The market or equilibrium price is $__________.
b) When 10,000 units
are produced and consumed, total consumer surplus is $__________,
and total producer surplus is $__________.
c) At the market
price in part a, the net gain to consumers when 10,000
units are purchased is $__________.
d) At the market
price in part a, the net gain to producers...
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