1) A good that generates a negative externality is sold in a competitive market. Demand is...
1) A good that generates a negative externality is sold in a competitive market. Demand is defined by P(Q)=600-2Q and supply is defined by P(Q)=Q. The externality from production is E(Q)=0.5Q2.
a)What is the quantity produced in the competitive equilibrium? Q=
b)What is the price in the competitive equilibrium? P=
c)What is consumer surplus in the competitive equilibrium? CS=
d)What is producer surplus in the competitive equilibrium? PS=
e)What is the total value of the externality in the competitive equilibrium? E=
Homework Answers
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1) A good that generates a negative externality is sold in a
competitive market. Demand is...
Suppose that market demand for a good is given by QD(P) = 10−P. The total cost...
Suppose that market demand for a good is given by
QD(P) = 10−P. The total cost of production is TC(Q) =
2Q2. Determine quantity QM and price
PM that a monopolist will choose in this market.
Calculate consumer surplus (CS), producer surplus (PS), and the
deadweight loss (DWL) resulting from the monopoly. Graphical
Solution would suffice!
1) (25 points) Suppose that market demand for a good is given by Q”(P) - 10-P. The total cost of production is TCQ) =...
3. The demand in a market is Q (P) 150-3P. The supply in the market is...
3. The demand in a market is Q (P) 150-3P. The supply in the market is QS(P)- 3P- 30 (a) Find the competitive equilibrium in the market (P*, Q*) (b) Determine the levels of Consumer, Producer and Total Surplus in the competitive equilibrium (c) Consumption of the good leads to a negative externality. The external marginal benefit function is mbeQw . Draw a graph that shows the Demand, Supply and the Social Marginal Benefits. where measures units consumed in the...
The perfectly competitive firm and market in the short run Consider a perfectly competitive market where...
The perfectly competitive firm and market in the short run Consider a perfectly competitive market where demand is QD = 2,000 - 40P and quantity is measured in units while price is measured in dollars per unit. The long run supply is QS = 100P - 800. a) Find the equilibrium price and the equilibrium quantity. b) When the market is in equilibrium, what is the total expenditure in this market? c) When the market is in equilibrium, what is...
The following supply and demand functions describe the competitive market Q2+4P Q40-2P where Q and Q"...
The following supply and demand functions describe the competitive market Q2+4P Q40-2P where Q and Q" are the quantities supplied and demanded, and P is the market price. (a) What are the equilibrium price, P, and quantity, Q"? (b) Compute the producer and consumer surplus that results from the market equilibrium in (a). Hint: To solve this problem, try drawing a graph of this market. Then recall the definitions from class: CS is the area under the demand curve and...
For Questions 1-15, consider a competitive market for a good where the demand curve is determined...
For Questions 1-15, consider a competitive market for a good where the demand curve is determined by: the demand function: P = 5+-1*Qd and the supply curve is determined by the supply function: P = 0.5*Qs. Where P stands for Price, QD is quantity demanded and QS is quantity supplied. What is the quantity demanded of the good when the price level is P = $4? QUESTION 2 What is the quantity supplied of the good when the price level...
Q=100,000-10,000P solve for the consumer surplus at the equilibrium price and quantity Demand: Let the Market...
Q=100,000-10,000P solve for the consumer surplus at the
equilibrium price and quantity
Demand: Let the Market Demand curve for soybeans be given by the following equation: Q=100,000 -10,000P where the quantity of soybeans in kilograms P = the price of soybeans in dollars per kilogram. Supply: Let the Market Supply curve for soybeans be given by the equation: Q=-5,000+ 5,000P 3) Consumer Surplus: The Consumer Surplus (CS) is the triangular area under the demand curve and above the equilibrium price....
Homework 2: Welfare Analysis 1. Let's say that the market for barley in the US is:...
Homework 2: Welfare Analysis 1. Let's say that the market for barley in the US is: Demand function: Q = 4 - VP: Supply function: Q = P-4 where P is price in S/bushel and Q is quantity in millions of bushels sold. Find the equilibrium price and quantity for this competitive market solution and graph it. Let's say that the world price is $7/bushel. Calculate and show graphically the amount produced domestically and the amount consumed domestically Using letters...
I need parts D, E, F only! 1. Consider a firm that manufactures dyed textiles. The...
I need parts D, E, F only!
1. Consider a firm that manufactures dyed textiles. The firm incurs a marginal cost of MC 2Q Suppose that for every textile produced, there is an externality cost of 12 (from dyes being leaked into the water). So the true social marginal cost of widget production is MC = 2Q+12. Imagine that the (a) Assuming this is a perfectly competitive market, write out the equation for the firm's supply (b) Calculate the equilibrium...
Imagine that you have been given a job as an economic advisor to evaluate a certain...
Imagine that you have been given a job as an economic advisor to evaluate a certain competitive US manufacturing industry. Your (accurate) statistical analysis indicates the market is characterized by demand of Qd = 200 - P and supply of Qs = P - 20. Solve for equilibrium price P* and quantity Q*. Depict the supply and demand curves on the usual P, Q diagram. Label all intercepts. Clearly indicate and label the market equilibrium. Graphically indicate the areas of...
Steel production from a mill generates a negative externality because of the environmental damage linked to...
Steel production from a mill generates a negative externality because of the environmental damage linked to air and water pollution. Suppose the market demand and supply curves are given by: Demand (MB): P = 400 - 3Qd Supply (MC): P = 200 + Qs Q is tons of steel and P is price per ton of steel. Note in this form, the demand and supply curve are solved for P -- you can see directly the lines on our supply and demand...
Suppose that market demand for a good is given by
QD(P) = 10−P. The total cost of production is TC(Q) =
2Q2. Determine quantity QM and price
PM that a monopolist will choose in this market.
Calculate consumer surplus (CS), producer surplus (PS), and the
deadweight loss (DWL) resulting from the monopoly. Graphical
Solution would suffice!
1) (25 points) Suppose that market demand for a good is given by Q”(P) - 10-P. The total cost of production is TCQ) =...
3. The demand in a market is Q (P) 150-3P. The supply in the market is QS(P)- 3P- 30 (a) Find the competitive equilibrium in the market (P*, Q*) (b) Determine the levels of Consumer, Producer and Total Surplus in the competitive equilibrium (c) Consumption of the good leads to a negative externality. The external marginal benefit function is mbeQw . Draw a graph that shows the Demand, Supply and the Social Marginal Benefits. where measures units consumed in the...
The following supply and demand functions describe the competitive market Q2+4P Q40-2P where Q and Q" are the quantities supplied and demanded, and P is the market price. (a) What are the equilibrium price, P, and quantity, Q"? (b) Compute the producer and consumer surplus that results from the market equilibrium in (a). Hint: To solve this problem, try drawing a graph of this market. Then recall the definitions from class: CS is the area under the demand curve and...
Q=100,000-10,000P solve for the consumer surplus at the
equilibrium price and quantity
Demand: Let the Market Demand curve for soybeans be given by the following equation: Q=100,000 -10,000P where the quantity of soybeans in kilograms P = the price of soybeans in dollars per kilogram. Supply: Let the Market Supply curve for soybeans be given by the equation: Q=-5,000+ 5,000P 3) Consumer Surplus: The Consumer Surplus (CS) is the triangular area under the demand curve and above the equilibrium price....
Homework 2: Welfare Analysis 1. Let's say that the market for barley in the US is: Demand function: Q = 4 - VP: Supply function: Q = P-4 where P is price in S/bushel and Q is quantity in millions of bushels sold. Find the equilibrium price and quantity for this competitive market solution and graph it. Let's say that the world price is $7/bushel. Calculate and show graphically the amount produced domestically and the amount consumed domestically Using letters...
I need parts D, E, F only!
1. Consider a firm that manufactures dyed textiles. The firm incurs a marginal cost of MC 2Q Suppose that for every textile produced, there is an externality cost of 12 (from dyes being leaked into the water). So the true social marginal cost of widget production is MC = 2Q+12. Imagine that the (a) Assuming this is a perfectly competitive market, write out the equation for the firm's supply (b) Calculate the equilibrium...
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