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Equilibrium price is $100. Qd = Qs i.e. 400-P = 3P.
Equilibrium quantity is 300 units. Put the value of equilibrium price either in Qd or Qs.
A price ceiling is the legal maximum price for a good. The price ceiling is less (i.e. below the equilibrium level)
Market price will be $80.
Quantity supplied will be less (i.e.3P= 3*80 = 240 units.)
Quantity demanded will be more (i.e. 400-P= 400-80 = 320 units).
Price ceiling results in Shortage when it is less than the equilibrium price and in surplus if it is above the equilibrium.
A price floor is a minimum price at which a product is permitted to sell. The price floor is less (i.e. below the equilibrium level)
Market price will be $100.
Quantity supplied will be same (i.e.3P= 3*100 = 300 units.)
Quantity demanded will be more (i.e. 400-P= 400-100 = 300 units).
Price floor results in no change when its below the equilibrium price and in surplus if it is above the equilibrium.
With tax, market price will be $130 (i.e. Qd = Qs; 3P-120 = 400-P)
Quantity supplied will be less than eequilibrium level (i.e.3P-120 = 3*130-120 = 270 units.)
Quantity demanded will be less than eequilibrium leve (i.e. 400-P= 400-130 = 270 units).
The tax will results in new equilibrium.
A market is described by the following supply and demand curves: Qs = 3P Qd =...
10. Problems and Applications Q10 A market is described by the following supply and demand curves: QS = 4P QD = 400-P The equilibrium price is $_______ and the equilibrium quantity is _______ . Suppose the government imposes a price ceiling of $90. This price ceiling is _______ , and the market price will be $_______ . The quantity supplied will be _______ and the quantity demanded will be _______ . Therefore, a price ceiling of $90 will result in _______ . Suppose the government imposes a price...
10. Problems and Applications Q10 A market is described by the following supply-and-demand curves: QSQS = = 3P3P QDQD = = 400−P400−P The equilibrium price is and the equilibrium quantity is .Suppose the government imposes a price ceiling of $120. This price ceiling is , and the market price will be . The quantity supplied will be , and the quantity demanded will be . Therefore, a price ceiling of $120 will result in .Suppose the government imposes a price floor of...
The market demand and supply is described by the following equations QD = 250 - 2P QS 3P 1) Find the market equilibrium. 2) What is the CS, PS, and W in this market? 3) Assume that the government introduces a equilibrium? price ceiling of p = 15. What is the new 4) Find the change in CS, PS, and W. Is there Dead Weight Loss? if so, of how much? 5) What does this tell you about the welfare...
Suppose demand and supply are given by Qd = 50 - P and Qs = 0.5P - 10. a. What are the equilibrium quantity and price in this market? Equilibrium quantity: Equilibrium price: b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $48 is imposed in this market. Quantity demanded: Quantity supplied: Surplus: c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling...
1 Suppose the demand for shoes is given by: QD= 210 -2P. The supply of shoes is given by: QS= 9P -120. Calculate the Gains from Trade (also known as Economic Surplus) that would exist in this market in a competitive equilibrium. 2 Suppose the demand for jackets was given by: QD= 140 -0.4P. The supply of jackets is given by: QS= 4P -80. Suppose the price was $49 per jacket. Calculate whether there is a surplus or shortage of...
Consider the following supply and demand functions qD = 12 - 3p qS = -3 + 2p Using the supply and demand functions, suppose a price ceiling of p = 2 were implemented. How much is supplied to the market and how much is demanded? What is the excess demand? Calculate the consumer surplus, producer surplus, and welfare level without the priceceiling. Calculate the consumer surplus, producer surplus, welfare level, and dead weight loss withthis price ceiling. What if the...
4. Suppose the market for grass seed can be expressed as: Demand: Qd = 200 - 5P Supply: Qs = 40 + 5P If the government collects a $5 specific tax from sellers (here you can change the supply equation to Qs = 40 + 5(P-t) or Qs = 15+ 5P, How much will the quantity demanded change from the amount demanded before the tax? What price will consumers pay after the tax? What price will sellers receive after the...
The wheat market is perfectly competitive, and the market supply and demand curves are given by the following equations: QD = 20,000,000 - 4,000,000P QS = 7,000,000 + 2,500,000P, where QD and QS are quantity demanded and quantity supplied measured in bushels, and P = price per bushel. a. Determine consumer surplus at the equilibrium price and quantity. b. Assume that the government has imposed a price floor at $2.25 per bushel and agrees to buy any resulting excess supply. How many bushels of wheat...
Suppose market demand and supply are given by Qd-300 - 4P and QS 50 3P. The equilibrium price is: Multiple Choice $35 $40 $50 $60.
Consider a perfectly competitive market where Demand is described as Qd 100-2P. a. If the market price is 10, how many units are consumed in the market? What is the consumer surplus in the market? b. Suppose the market Supply is described as Qs 10 P. What is the equilibrium price in the market? Quantity? C. Suppose the market Supply is described as Qs 10+ P. What is the excess quantity supplied in the market at P demanded in the...